The global sugar supply balance is expected to deteriorate in the 2021/22 season, which began in October, due to the higher use of sugar cane for ethanol production in India and lower production in Brazil, broker StoneX announced yesterday.
During the season, demand will exceed production for the third straight year, StoneX said, forecasting a supply deficit of 1.8 million tons, 1 million tons more than estimated in October.
Worldwide production was estimated at 186.6 million tons, while demand was forecast at 188.4 million tons. The broker said that demand has improved recently as ocean freight prices have fallen. There have been extensive purchases from Asian countries and refinery centers.
India produces a record amount of sugar cane after favorable weather, but the country's ethanol blending program will take the equivalent of 3 million tons of sugar off the market, StoneX said, resulting in sugar production essentially the same as in pre-harvest or around 31 million tons.
Production in Brazil's Center South region is 31.3 million tons, 12% less than a year earlier.
StoneX said Brazil's new sugar season, which begins in April, will see total sugar cane volumes improve by 6% to 565.3 million tons.
Sugar production in the European Union and the United Kingdom is expected to increase by almost 12% to 17.2 million tons in 2021/22 (Oct.-Sept.), As a wetter summer in Europe increased beet yields.
Source
Hansa Terminhandel GmbH