August 24, 2017 at 12:23 PM

Raw sugar futures traded in New York have fallen by almost 30 percent this year, the worst performer in the Bloomberg Commodity Index. So, the logical thing would be for producers to cut back on supply, but the commodities market isn't always logical. The global sugar surplus is expanding as Brazil, Thailand and the European Union drive world production to record, according to Green Pool Commodity Specialists. Supplies will outpace demand by 7.1 million metric tons in the 2017-18 season that starts in October in most countries, a 29 percent increase from a May forecast, the Brisbane, Australia-based researcher said in a report Wednesday. That would reverse shortages in the previous two seasons and represent the biggest surplus in five years, according to Bloomberg News’s Isis Almeida. Consumption growth has also slowed compared with historical averages due to health concerns and alternative sweeteners. "We are now reasonably confident, given the monsoon is two -thirds to three-quarters over, that Thailand, in particular, had excellent rainfall," said Tom McNeill, a director at Green Pool. "Europe has had plenty of catch-up rainfall and the beet tests are good."