MUMBAI (Commoditiescontrol) - Global production for 2016/17 is up 5 million metric tons (raw value) to 171 million as gains in Brazil and the European Union and most of the top 25 producers more than offset declines in India and Thailand. Global raw sugar monthly average prices, after falling for over a year and bottoming at less than 11 cents per pound in August 2015, have been trending higher to near 23 cents in October 2016. Despite high prices, consumption is forecast at a record 174 million tons, drawing stocks down to the lowest level since 2010/11. The global sugar deficit narrows from 6.7 million tons in 2015/16 to a forecast 2.6 million.
Despite production gains in 2016/17, low stock levels portend another year of rebuilding supplies amid strong prices.
2016/17 Sugar Overview
United States production is forecast up 300,000 tons from last year to a record 8.5 million on higher yields. Imports are expected to decline 600,000 tons to 2.4 million with consumption relatively unchanged. Stocks are projected to dip 8.0 percent to 1.7 million tons.
Brazil’s production is forecast to rise 3.1 million tons to 37.8 million on favorable weather and a higher percentage of sugarcane (forecast at 45 percent compared to 43 percent the year before) being diverted toward sugar production instead of ethanol. Exports are projected up 2.8 million tons to 27.1 million on greater exportable supplies and higher demand from markets such as India and Indonesia. Consumption is down slightly on lower consumer purchases of processed India’s production is forecast to drop 3.6 million tons to 23.9 million due to lower area and yield. India is the world’s largest consumer with consumption forecast to rise marginally to a record 27.2 million tons. Production is forecast up in Uttar Pradesh, while that from Maharashtra and Karnataka is lower than expected. Exports and stocks are forecast down sharply.
Thailand’s production is forecast down 470,000 tons to 9.3 million as severe drought conditions during the growing stage are expected to lower yields. However, exports are up slightly as stocks are drawn down to meet demand. Consumption is up slightly on growing household and industrial uses. Production in the European Union is forecast to rebound 1.9 million tons to 16.2 million on higher sugar beet area. Consumption is projected flat at 18.8 million and imports are down. Exports are unchanged at 1.5 million tons, limited by the World Trade Organization sugar export ceiling.
China’s production is forecast up 700,000 tons to 9.5 million on higher area and yields. Consumption is forecast flat. Imports are flat year over year but have been trending higher. Stocks are forecast down sharply to the lowest level since 2010/11.
Mexico’s production is forecast slightly higher at 6.7 million tons while exports are expected up 8.9 percent to 1.4 million tons due to exports to non-U.S. markets. The U.S.-Mexico Suspension Agreement establishes minimum, or floor, prices to guard against undercutting or suppression of U.S. prices. These minimum prices are $0.26 per pound for refined sugar and $0.2225 per pound for all other sugar. Stocks are expected up amid flat consumption.
Australia’s sugar production is projected up 200,000 tons to 5.1 million. Exports, up nearly 30 percent in 4 years, are forecast higher at 4.0 million tons on high demand from markets such as Japan and South Korea and on higher exportable supplies.
Russia’s production is expected to climb 400,000 tons to 5.6 million on both higher area and yield. Consumption is expected to continue to rise due to expansion in production of home-made alcohol. Imports are forecast down slightly.
Pakistan’s production is forecast up 460,000 tons to a record 5.7 million reflecting growth in area. Sugar is favored by farmers who value the government-established procurement price for sugarcane in the face of lower prices for other crops. Consumption is forecast up slightly, but stocks are expected to soar.
Selected 2015/16 Revisions from May 2016 Forecast:
‐ World production revised 900,000 tons higher to 165.8 million.
o China is up 400,000 tons to 8.8 million on increased area.
o EU is increased 280,000 tons.
‐ World imports are revised 1.2 million tons lower to 53.3 million.
o China down 700,000 tons to 6.0 million on higher production and trade data update.
o Iran is lowered 600,000 tons to 790,000 on higher production and trade data update.
‐ World Exports are lowered 1.3 million tons to 53.6 million tons.
o Thailand drops 1.0 million tons on a revised forecast.
(By Commoditiescontrol Bureau; +91-22-40015533)