Global sugar production will fall short of expected consumption for a second consecutive season in 2023/24 (October-September) as near-record Brazilian output will not be enough to offset declines elsewhere, reported Nasdaq according to Reuters.
Sugar consultancy CovrigAnalytics said in a report that it expects a global supply deficit of 2.2 million tonnes (MMT) in 2023/24, while broker and supply chain services provider Czarnikow sees a deficit of 900,000 tonnes.
CovrigAnalytics has updated its production estimates with cuts in Thailand (-2.52m tonnes), India (-1.1m tonnes), Pakistan (-505,000 tonnes), China (-304,350 tonnes), the Philippines (-225,000 tonnes), Mexico (-215,000 tonnes) and the European Union (-250,000 tonnes).
Dry weather
“These cuts in output expectations are mainly due to dry weather impacting the crops and to lower acreage (in some regions). The El Nino phenomenon might further hamper the development and harvesting of these crops in August-April,” the company said in a report.
The Brazilian crop in the center-south was increased to 38.7 million tonnes from 33.8 million tonnes in the previous season, as mills allocated as much cane as possible to sugar production and the weather was favorable.
CovrigAnalytics said mills in Brazil are investing in more sugar production capacity to be able to use as much as 55% of cane for sugar production in a few years’ time.
Czarnikow said production in Thailand would be the lowest in a decade at just 7.4 million tonnes, down from 10.8 million tonnes in the previous season.
“This is driven by a combination of hot, dry, weather hindering cane development, and a large move by smaller farmers to planting cassava instead of sugarcane,” the broker said in an update to its global sugar estimates.
Czarnikow said the world will consume a record amount of sugar in 2023/24, at just over 179 million tons, due mostly to population growth that requires 2 million tons of additional volume every season.