Indian output retreat to help world sugar market back into deficit in 2019-20https://www.agrimoney.com/commodities/indian-output-retreat-to-help-world-sugar-market-back-into-deficit-in-2019-20--78802
February 01, 2019 at 10:59 AM
Indian output retreat to help world sugar market back into deficit in 2019-20
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”.
The Australia-based analysis group, in its first estimates for next season, forecast global sugar production falling for a second successive year, this time by 1.90m tonnes to 186.6m tonnes.
World consumption, meanwhile, will rise by 2.10m tonnes to a record 186.9m tonnes, putting an output shortfall of 1.36m tonnes on the cards.
That would be the first since the 961,000-tonne deficit recorded in 2016-17, although would be dwarfed by the output surpluses since, including the massive 19.6m-tonne excess recorded for 2017-18, on Green Pool estimates.
‘Positive for the market’
Indeed, the market faces “an enormous overhang in stocks as we approach the next harvest in 2019-20”, Green Pool said,
This despite cutting its expectations for the 2018-19 surplus by 963,000 tonnes, to 2.64m tonnes, reflecting in the main a reduced forecast for output, including a 200,000-tonne downgrade to 16.9m tonnes in the estimate for European Union production, after a drought hit to the beet crop.
The analysis group said that “given high global stocks… we suspect the market will take much of 2019 to work through its excess stocks.
"But even our small [2019-20] deficit at this point is a positive for the global market as it swings early from its surplus cycle.”
Green Pool’s estimate for weakened production next season rests in part on expectations that a cut in Thailand’s set cane price, to a decade low of 680 baht per tonne, will see farmers switch out of the crop, and see sugar output fall to 12.0m tonnes, from 13.8m tonnes in 2018-19.
However, the analysis group also flagged the potential for a sharp drop in India’s output, to a three-year low of 29.5m tonnes in 2019-20, from a level it pegged for this season at 33.5m tonnes.
While the 2018-19 figure is well above estimates from other commentators, including the Indian Sugar Mills Association, Green Pool said that “our view remains that the Indian industry has every incentive to talk down the size of the current crop”.
For next season - when this year’s May elections will be passed, potentially depleting the government’s interest in pleasing the important cane growers’ lobby – “we anticipate that there will have been lower planting due to some dry weather post-monsoon in 2018”, and with the potential for the spread of red rot disease.
For Brazil’s Centre South, Green Pool forecast a rebound in output, of 3.0m tonnes to 29.6m tonnes, given ideas of a recovery in the proportion of cane used to make the sweetener, rather than ethanol.
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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.Read More
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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.Read More
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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”.Read More
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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.Read More
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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.Read More
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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.Read More