Global sugar inventories will rise more than forecast to a record as consumption trails production for the fourth straight year and output gains in Thailand, the second-biggest exporter, U.S government data showed.
Stockpiles will increase 0.5 percent to 43.379 million metric tons in the marketing period ending in 2014 for most countries from a year earlier, the U.S. Department of Agriculture said today in a report. That topped a May forecast by 13 percent. Thailand’s output will climb to a record 10.9 million tons, up 9 percent from a year earlier and 3.8 percent more than estimated in May.
Global production will drop 0.7 percent to 174.8 million tons, partly on smaller crops in India and Russia, the USDA said. Consumption will increase 2.4 percent to 167.6 million tons as lower prices spur demand and trade, the agency said.
This year, raw sugar on ICE Futures U.S. in New York has dropped 10 percent. The price headed for the third straight annual decline, the longest slump in 21 years.
The USDA forecast for output in Brazil, the top producer and exporter, was cut 4.1 percent to 38.8 million tons. The nation’s marketing year runs from May to April.
The estimate for shipments from India, the second-largest producer, more than tripled to 2 million tons amid large stockpiles and demand in Africa.
India’s marketing year runs from October to September. The USDA global estimates cover at least 10 different periods.