Aug. 31 (Bloomberg) -- The global sugar surplus will expand 13 percent in the 2012-13 season that starts in October in most countries from the same period a year earlier, according to the International Sugar Organization in London.
Sugar supplies will be 5.9 million metric tons higher than demand, up from a surplus forecast of 5.2 million tons in 2011-12, the group said in its first estimate for the new season. Global production will climb by 3.9 million tons to a record 177.4 million tons, while consumption will grow 1.9 percent, below the 10-year average of 2.4 percent, to 171.5 million tons, the ISO said in a quarterly report e-mailed today.
“In contrast to the previous year, when a new global production record was achieved despite a significant decrease in sugar output in Brazil, in 2012-13 a record high global total can be firmly attributed to a noteworthy recovery projected for the world’s leading producer,” the ISO said.
Sugar production in Brazil will rise 3.9 million tons to 38.1 million tons in 2012-13 and will remain below the 2009-10 record of 40.9 million tons, the ISO said. In Australia, the third-biggest exporter, production will increase to 4.5 million tons from 4 million tons a year earlier, according to the report. Output in China, the second biggest consumer, will rise to 13.6 million tons from 12.5 million tons in 2011-12.
“Remunerative cane and beet prices led to a significant rise in the area under cultivation in recent years,” the ISO said, commenting on China.
Production in India, the second-biggest producer, will drop to 26.6 million tons from 28 million tons in 2011-12 because of dry weather. In Thailand, output will fall to 10.2 million tons from 10.6 million tons this season, the ISO said.
Sugar prices have fallen 15 percent so far this year and a global surplus will “keep world prices under pressure,” the ISO said.
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