The global sugar sector, after five years of production surpluses, may be in for a succession of output shortfalls, Green Pool said, as the analysis group widened its forecast for the deficit this season.

The Australia-based group, citing crop damage from El Nino-induced weather setbacks, raised by 1.01m tonnes to 5.623m tonnes its estimate for the shortfall in world production behind consumption in 2015-16.

This would represent the first deficit in six seasons, after a spree of surpluses totalling more than 28m tonnes, on Green Pool estimates.

And it may not be the last, with the group saying that this season's shortfall "may mark the swing back from five years of surplus into a deficit cycle".

Demand vs supply

The last time the world slipped back into a production shortfall, in 2008-09, heralded a further deficit year too, with output falling a combined 23m tonnes behind demand over the two seasons.

And some other commentators have also outlined the potential for 2015-16 not to provide an isolated deficit, with Jose Orive, executive director of the International Sugar Organisation, last month forecasting a deficit of 6.2m tonnes in 2016-17.

This rested on an estimate of consumption extending annual growth of about 2.5%, while output stays stable.

Mr Orive pegged at 2.5m tonnes the deficit this season.

'El Nino begins to bite'

Green Pool's raised estimate for the 2015-16 world shortfall reflected in the main a cut to the production forecast, to 177.267m tonnes, as "El Nino begins to bite" in Asian, South African and Central American areas where it is often linked to dryness.

"While last year's threatening El Niño retreated, this year it has returned with a vengeance," the group said, flagging for example, a forecast of 1.69m tonnes for South African production which was the "worst result we can find in our records".

"The dryness has also extended to the Philippines and Vietnam, where crops have struggled over the past two seasons," with Indonesia presenting "an ongoing risk".

And the group highlighted too the decreased expectations for output in India, the second-ranked producing country, foreseeing output of 26.5m tonnes.

Brazil outlook

The downgrades more than offset an increase to 500,000 tonnes, to 30.8m tonnes, in the estimate for production in Brazil's key Centre South region, flagging increased expectations for the cane harvest.

Crushers will have more than 620m tonnes of cane available to them in 2015-16, although processing volumes will likely stop at around 595m tonnes, with rain forcing growers to leave some crop unharvested.