Global Sugar Shortage Outlook Raised by Green Pool on El Nino

March 24, 2016 at 1:03 PM

March 23, 2016 — 11:30 PM AEST
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  • Researcher increases estimate for 2016-17 deficit by 19%
  • Dry weather hitting cane crops in India, Thailand, China

A global shortage of sugar will be larger than previously expected in the next season as El Nino-induced droughts hurt crops in Asia, Green Pool Commodity Specialists said.

World consumption will exceed production by 4.95 million metric tons of raw sugar in the 2016-17 season, the Brisbane, Australia-based researcher said in an e-mailed report on Wednesday. That’s 19 percent more than its January forecast. The world is heading for a second straight annual deficit, following half a decade of surpluses.

Drought is eroding potential production in India, Thailand and China for this season and the next, according to Green Pool. Below-average monsoon rainfall in the past year in India, the world’s second-largest producer, curbed yields and cut planting for the upcoming crop. Prospects for tighter supplies have boosted sugar prices this year, with futures in New York climbing to the highest since October 2014.


“El Nino drought has impacted many Asian cane crops and reduced overall production,” Green Pool said. “The drought impact is anticipated to carry forward into 2016-17 because it has reduced planting, reduced plant health and reduced plant care.”

Green Pool also increased its estimate for the 2015-16 shortage. The researcher now expects a deficit of 6.65 million tons, compared with an earlier forecast of 4.14 million tons.