MUMBAI (Commoditiescontrol) - Global sugar supply is estimated to rise at 190 million tonnes in next sugar season 2017-18 (October-September), while global sugar industry expected have surplus supply of 4.81 million tonnes, the Australian Bureau of Agril. & Resource Economics and Sciences (ABARES) forecasts in its quarterly report.
Higher Sugar Production On Favourable Weather Conditions
ABARES released its quarterly report on Tuesday, September 19, according to which global sugar output is estimated to rise by 7 percent from previous season at 190 million tonnes. Sugar output is predicted to increase in next season as sugar production is expected to rise in major sugar producing countries like, Brazil, the European Union, India, Pakistan, Russia, China and Thailand etc.
In 2017-18, sugar production in Brazil, the world’s largest sugar producer and exporter, is forecast to increase by 1 per cent to 40 million tonnes, Brazilian mills favoured sugar production over ethanol as of August end.
In China and Thailand, sweetener production is expected to increase in next season in response to higher relative returns, increased yields and a return to average monsoon rains during the 2016 planting season. Although, sugar production in China is forecast to be 12 million tonnes in 2017-18 (June-May), up by 15 per cent year-on-year.
While Thailand's sugar production is forecast to be 12 million tonnes, up by 18 per cent. Thailand is the second largest sugar exporter after Brazil.
In India, a second biggest sugar producer and largest sugar consumer, increased prices and better than an average monsoon rains and higher yields are expected to drive sugar production up by 11 per cent to around 27 million tonnes in 2017-18.
Sugar production in the European Union is also expected to cross 20 million tonnes in 2017-18, about 18 per cent higher from last season. Sugar output is estimated to rise in EU due to abolition of the sugar quota regime from next season.
Global Sweetener Prices May Remain Lower
Sugar prices may remain lower due to supply glut. The world benchmark contract for raw sugar contract no. 11, which trade on the Intercontinental Exchange (ICE), is forecast to fall by 24 per cent in 2017-18 SS to an average price of US 13 cents per pound, a downward revision from previous forecast of US 15 cents a pound in June. However, sugar prices may remain under pressure due to the higher supply.
Consumption Expected To Rise On Lower Price
On other hand, global sugar consumption is also forecast to rise by around 2 percent to 185 million tonnes from previous season. Sugar consumption is expected to rise due to the lower rates and increased consumer incomes. Consumption is forecast to increase in countries like, Brazil, China, India, Indonesia, Pakistan, the Russian Federation and Ukraine and rising consumer incomes.
While sugar consumption is expected fall in the European Union and the United States because of long-term declines in the population growth rate, as well as trends in diet and nutrition policies driven by health concerns.
Exports Will Rise On Higher Output
Sugar exports also estimated to rise by 3 percent in upcoming season to 70 million tonnes from 2016-17. Due to higher exports from Brazil and Thailand are expected to meet strong import demand from Algeria, Bangladesh, Indonesia, Malaysia, Nigeria, the United Arab Emirates and the United States.
Increased Ending Stock Over Production-Consumption Gap
Moreover, sugar ending stock for next season forecast to increase by 7 per cent to around 76 million tonnes as a result of world sugar production rising at a faster rate from consumption. While the global stocks-to-use ratio for 2017-18 is expected to increase to 41 percent from 39 percent in 2016-17.
World Sugar Demand and Supply: October to September
| |
|
Fig. are in million tonnes |
| Particulars |
2015–16 |
2016–17* |
2017–18# |
Change (%) |
| Production |
174.20 |
178.31 |
190.02 |
6.56 |
| Consumption |
179.90 |
181.50 |
185.21 |
2.04 |
| Surplus/Deficit |
-5.70 |
-3.19 |
4.81 |
- |
| Exports |
58.50 |
67.95 |
70.02 |
2.94 |
| Closing stocks |
74.80 |
71.60 |
76.40 |
6.70 |
| Stocks-to-use ratio (%) |
41.58 |
39.45 |
41.25 |
- |
| Price (USc/lb) |
16.65 |
17.00 |
13.00 |
-23.53 |
#ABARES forecast *ABARES estimate
Sources: ABARES; Australian Bureau of Statistics; F.O. Licht, International Sugar and Sweetener Report, US Department of Agriculture
(By Commoditiescontrol Bureau: +91-22-40015532)
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