Sugar prices fall under pressure from forecasts of increased production in Brazil
World sugar prices since early September, grew by 25% amid shortage of rain in Brazil and a reduction in the harvest of sugar beet in the EU, Ukraine and Russia. In March this year, quotes for raw sugar on the stock exchange in new York fell by 40% to the lowest since June 2008 level 215 $/t, but over the summer grew to 265 $/t, and since September has accelerated the growth and in November reached 340 $/t. In recent weeks, amid forecasts of output growth in Brazil and India the price dropped to 325 $/t
After two seasons of surplus sugar and the accumulation of large stocks on the world market, in the current year, sugar production due to drought conditions will be reduced in Brazil, Thailand, Ukraine, Russia and the EU.
According to the forecast of the Agency ISO in 2020/21 MG global sugar production will fall to 171,1 million tonnes, causing shortage of sugar is estimated at 3.5 million tons compared with a surplus of 1.86 million tonnes in 2019/20 Mr.
the company estimates that the Thai Sugar Mills Corp, the second largest world sugar exporter, Thailand will reduce in 2020/21 MG sugar production 13% to 11-year low of 7.2 million tonnes.
France, which is the largest sugar producer in the EU in 2020 will be reduced compared to the previous year, the production of sugar beet from 30.5 million tons to the lowest in 19 years the level of 27.2 million tons.
In Russia, by Agency estimations IKAR, sugar production from last year's record 7,864 million tons in the current season will be reduced to 4.85 5.2 million tonnes of the reduction in sowing areas by 18%, while domestic consumption is 6 million tons.
In Ukraine, sugar production will decrease in comparison with the previous season, from 1.48 to 1.1-1.2 million tons due to dry conditions and reduction in sowing areas.
In Brazil, despite the reduction in yield of sugarcane due to deficit of rainfall, sugar production could remain at last year's level, as on the back of high sugar prices, the share of processing in the ethanol decreases and sugar increases. According to the company Unica, the proportion of cane used for sugar production has increased from 28.42% in 2019/20 MG to 41.74% to 2020/21 MG.
India, according to the USDA attaché forecast in 2020/21 MG will increase the sugar production of 16.8% to 33,76 million tonnes, and its export – by 3.5% to 6 million tons due to favorable weather and higher prices for sugar in Brazil.
In Russia and Ukraine sugar prices in November rose compared to last year's levels by 40-60%, but a significant production and inventories amid a decline in exports due to high domestic prices will not lead to shortage of sugar in the markets of Ukraine and CIS countries.
