MUMBAI (Commoditiescontrol) - Global sugar market likely to have surplus sugar output in current as well as in coming sugar season, while the surplus supply will weigh on sugar prices in the international markets.
The global market may see expected increase in sugar output from the European Union, India, Pakistan, Thailand, China and other major producers. While Brazil, the largest sugar producer is likely to witnessed a tad down in sugar production next season. This is primarily because mills are diverted to ethanol production in the country and the expected drop in sugarcane harvest in Centre-South region due to replantings in next season.
More than 90% of Brazil's total sugarcane is cultivated in the Centre-South region.
According to the various international sugar research agencies, global sugar industry is expected to have surplus sugar production in ongoing and upcoming sugar season, i.e. 2017-18 and 2018-19 respectively, during October to September.
Societe Generale, a France- based financial services company, predicted the surplus sugar production of 55 lakh tonnes in next sugar season, 2018-19. While for current season in 2017-18 sugar surplus is projected at 53 lakh tonnes. The financial services firm also estimated the world's sugar production to be reach at 1795 lakh tonnes in current season.
Another financial services company, INTL FCStone forecasted the sugar surplus of 28 lakh tonnes for 2017-18, about 2 lakh tonnes higher from previous estimate. While INTL FCStone also raised the global demand by 0.8% from prior season to 1831 lakh tonnes for ongoing season.
Echoing the same opinion, Green Pool, a Australian commodity specialist, also estimated the global sugar surplus at higher level to 98 lakh tonnes in 2017-18, while sugar production is projected at 1930.5 lakh tonnes. Green pool, also forecasted the slight rise in global sweetener consumption by 1.3% in current season.
The Foreign Agricultural Service of the United States Department of Agriculture (USDA), projected the almost 107.3 lakh tonnes of surplus supply in global market during 2017-18, and estimated the production at 1849.5 lakh tonnes.
Likewise, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), global sugar market will have 58 lakh tonnes of excess sugar production in current season over higher production estimates.
Some other major commodity analysis groups also projected the excess production for 2017-18 season. As per the F.O. Licht, a soft commodity analyst, world sugar industry will have 44 million tonnes of surplus sugar in 2017-18.
While Platts Kingsman forecasted a surplus of 49 lakh tonnes during October 2017 to September 2018.
Rabobank, an international financial services provider also projected the surplus of 45 lakh tonnes in current season.
On other hand, an agricultural commodities merchant, the ED&F Man also expected the surplus sugar output of 58 lakh tonnes during 2017-18 in world market.
Besides that, the Brazilian agricultural consulting firm, Datagro declined the global surplus estimate to 4.30 lakh tonnes for current season, from earlier forecast of 29.5 lakh tonnes, over expected production drop in Brazil. The lowest surplus estimate for the season.
According to the International Sugar Organization, a London-based inter-governmental body, the global sugar production will reach at 1794.5 lakh tonnes in the 2017-18, about 110.8 lakh tonnes higher from last season. While, there will 50.3 lakh tonnes of surplus sugar in global industry in ongoing season.
However, the average global sugar surplus production is estimated to be at 60 lakh tonnes in current sugar season 2017-18 (October-September).
| Particulars (Lakh tonnes) |
2016-17 |
2017-18 |
| Production |
1683.73 |
1794.48 |
| Consumption |
1714.78 |
1744.14 |
| Surplus/Deficit |
-31.05 |
50.34 |
| Import Demand |
600.4 |
574.67 |
| Export Availability |
600.95 |
610.94 |
| Ending Stocks |
882.11 |
896.18 |
| Stocks/consumption ratio |
51% |
51% |
Source: International Sugar Organization
(By Commoditiescontrol Bureau: +91-22-40015532)
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