China sugar makes for even more bearish global market

Analyst Green Pool has raised its forecast for an anticipated global sugar deficit in the 2019/20 season to 3.67 million tonnes, raw value, from a previous projection of 1.62 million.

Global sugar deficit will be 1.62 mln tons in 2019/20, smaller than previously forecast, as consumption growth slows, researcher Green Pool Commodity Specialists said in a report.

The world sugar market is on course for a shortfall of 1.36 million tonnes (raw value), analyst Green Pool said on Friday in its first forecast for the 2019/20 season.

World sugar production will fall behind consumption in 2019-20 for the first time in three seasons, and by the most in four, Green Pool said, terming the forecast a “positive for the market”.

Analyst Green Pool said on Wednesday it had raised its forecast for an anticipated global sugar surplus in the 2018/19 season to 3.60 million tonnes, raw value, from a previous projection of 3.22 million.

Analyst Green Pool said on Thursday it had trimmed its forecast for an anticipated global sugar surplus in the 2018/19 season to 4.24 million tonnes, raw value, from a previous projection of 6.62 million.

Green Pool, highlighting India’s soaring sugar supplies, cautioned over the potential for prices of the sweetener to remain “low-ish”, even as it cut its forecast for output in many other producing countries.

Changing consumer tastes raises the possibility of a long-term reduction in demand even as the world’s largest producers are notching record production. Green Pool Commodity Specialists, a consultancy, projects a 19 million-ton surplus this year, the largest ever.

Surging ethanol stockpiles and tumbling prices for the biofuel risk bringing back more sugar production in top grower Brazil. “Prices have been coming down, ethanol stocks are building. Demand is strong but is probably not sufficient to clear the stocks,” said Tom McNeill, a director at Brisbane, Australia-based researcher Green Pool Commodity Specialists. “I think this assumption that everyone has made that maximum ethanol is absolutely locked in could be challenged within the next three months.”

July raw sugar settled down 0.06 cent, or 0.5 percent, at 11.69 cents per lb. Focus remained on a global supply glut, with commodity analyst Green Pool forecasting a combined sugar surplus of almost 25 million tonnes for the 2017-18 and 2018-19 seasons.