The global sugar surplus will be 5.1 percent bigger than previously forecast as output expands in India, the world’s second-biggest producer, according to the London-based International Sugar Organization.
Production will exceed consumption by 4.73 million metric tons in the 12 months started Oct. 1, the ISO said in a report e-mailed today. That compares with an August estimate of 4.5 million tons. Output in India will rise by 1.5 million tons to 26.5 million tons because of a “good” monsoon, said Leonardo Bichara Rocha, a senior economist at the ISO.
“We’ve increased production in India and Thailand and reduced it in Brazil and the European Union, but the most significant increase was in India,” Rocha said by phone from London. “Production will be bigger with the good monsoon.”
Global sugar production will be 181.5 million tons, up from an August forecast of 180.8 million tons and 1.2 percent lower than last year, the ISO said. That’s the first decline in output since the 2008-09 season. Consumption will be 176.75 million tons, up 0.2 percent from the August forecast and 2.2 percent higher than a year earlier, the report showed.
While sugar output in the European Union will drop 5.3 percent from the August forecast to 16.19 million tons, millers in Thailand, the second-biggest exporter, will produce a record 11 million tons, 2.8 percent more than previously forecast, the group estimates. Producers in top-grower Brazil will make 41.1 million tons compared with 41.4 million tons.
The fourth consecutive global surplus is falling from a record 10.6 million tons in 2012-13 and there are indications that the excess phase will end in 2014-15, the ISO said. Prices, which dropped for five consecutive quarters through June, rebounded 7.2 percent in the three months ended Sept. 30.
“In the next season world sugar production may decline again by as much as two to three million tons, heralding the end of the surplus phase in the world sugar cycle,” it said. For now, “all three major elements of a surplus market are still evident: projected world production is higher than consumption; export availability exceeds import demand; and there is a high stocks to consumption ratio.”