Sugar output in Australia, the world’s third-biggest exporter, will rise 9.8 percent this year as ex-tropical cyclone Oswald brought moisture to growing areas, according to Green Pool Commodity Specialists Pty.
Millers in Australia will make 4.5 million metric tons of sugar this year, up from 4.1 million tons a year earlier, said Tom McNeill, a director at the Brisbane, Australia-based sugar and biofuels researcher. While there has been damage in some areas including Bundaberg in Queensland state, the storm brought moisture to other regions after two months of dryness, he said.
“There has been some serious damage in a few areas, but I think the overall state of the industry is that it should have been slightly beneficial because December and January were extremely dry,” McNeill said by phone from Brisbane today. “It was unseasonably dry for Australia.”
Rising production in Australia may add to a global surplus that Lausanne, Switzerland-based researcher Kingsman SA, owned by McGraw-Hill Cos., forecast at 11.5 million tons in the 12-months through Sept. 30. Sugar futures, which fell 39 percent in the past two years, are down another 5.8 percent in 2013. A third year of declines would mean the longest slump since 1992.
Sugar cane production in Australia will rise to 32 million tons this year, up from 29.8 million tons a year earlier, Tracey Allen, an analyst at Rabobank International, said in an interview in Dubai on Feb. 5. Rainfall brought by the storm will benefit yields in some areas of the country, she said.
Raw sugar for delivery in March added 1.6 percent to 18.43 cents a pound by 11:56 a.m. on ICE Futures U.S. in New York.