Green Pool Boosts 2017-18 Sugar Forecast by 28%
http://www.insidefutures.com/article/2037612/Morning%20Softs.%20%2008/23/17.htmlAugust 23, 2017 at 12:07 PM
Commodities consultancy Green Pool increased its estimate for global sugar production in 2017-18 by 28% to a 7.14 million metric ton surplus compared with its previous forecast in early May.
The forecast outstrips the International Sugar Organization's most recent estimate of 4 million tons, Rabobank's 2.7 million ton estimate, and F.O. Licht's forecast of 5.4 million tons.
Green Pool's upgrade to its forecast was primarily driven by a 6% increase to production estimates, which outstripped a 1.5% increase in its consumption forecast.
High prices in 2016 and weather provide a large boost to production, Green Pool said. Meanwhile the consultancy expects global consumption to be beset by those same high prices from 2016, high tariffs, higher taxes, and rising health concerns.
In the forecast update, Green Pool maintained its optimism that Brazil would see strong sugar production, despite recent tax changes that make it more profitable for crushers to produce ethanol. "It would take a much steeper fall in sugar prices to change that outlook," Green Pool said. Elsewhere, the consultancy raised its crop production estimates for Thailand for both this season and next, citing a beneficial monsoon after two years of El Nino-induced drought.
Green Pool left its Chinese production forecast unchanged. This came on the same day as new Chinese import figures showed a drop of 85% year-over-year of the quantities of sugar entering the country. That makes July's import figure of 59,533 tons the lowest since June 2013, according to ING in a morning note.
The consultancy also adjusted its 2016-17 deficit figure to 2.08 million tons from the late June estimate of 2.04 million tons--a 2% change--thanks to a later-than-usual Pakistani crop.
Raw sugar prices were last 1.1% higher at 13.66 U.S. cents.
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