Green Pool lifts forecast for 2017/18 sugar surplus

November 02, 2017 at 12:59 PM

Green Pool lifts forecast for 2017/18 sugar surplus
Reuters | Oct 31, 2017, 19:30 IST

The global sugar market is poised for a surplus of 9.80 million tonnes 2017/18, Australia-based analyst Green Pool said on Tuesday, amid stronger production and sluggish consumption growth.
The group raised its global surplus forecast for 2017/18 to 9.80 million tonnes, from a previous estimate of 7.14 million tonnes.
World sugar output is seen at a record 193.05 million tonnes, raw value, in 2017/18, lifted from a previous forecast for 191.14 million tonnes. This would represent an annual increase of more than 8 percent, from 178.66 million tonnes in 2016/17.
"Higher production in 17/18 is a result of the high global and domestic sugar prices over the past 12-18 months, combined with good seasonal weather conditions for most cane and beet producers," Green Pool said.
Output in the European Union was revised to 19.5 million tonnes, up about 23 percent year-on-year from 2016/17, the last season of production quotas in the bloc.
Pakistan, which saw a 35 percent year-on-year rise in production in 2016/17, is also forecast to further increase output next season, Green Pool said.
Russia and Ukraine are also poised to increase production and exports, further intensifying competition in the global market.
"What was a serious deficit region is now looking for export outlets," the analyst said.
Consumption, meanwhile, is seen rising to 182.26 million tonnes, up 1.3 percent from 179.94 million tonnes in 2016/17. It was previously forecast to increase by about 1.5 percent.
Green Pool said that consumption in both developed and developing countries has been hit by a number of factors including tariffs, trade barriers and health concerns.
"It remains our view that consumption is not what it used to be, and that those holding out for 1.5-2 percent growth rates may wait in vain."
Green Pool pegged the 2016/17 deficit at 1.78 million tonnes, revised from a prior estimate of 2.08 million tonnes.
Production for 2016/17 was seen at 178.66 million tonnes, while consumption is pegged at 179.94 million tonnes.
"While most had high hopes for this second deficit in two years, it has all but vaporised," Green Pool said.

(Reporting by Ana Ionova, editing by Louise Heavens)