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10.18
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The sugar market will remain under pressure in the foreseeable future

The global sugar market could be underfunded in 2019/20 after surpluses in the last two years in the EU and Brazil. But a big sugarcane harvest in India continues to weigh on the market. This is the market analysis of today's ADM Investor Service International. The sugar consumption decreases.
Accordingly, the sugar market will reach a deficit of 2 million tonnes in 2019/20. In 2018/19 there are surpluses of 4-5 million tons.
The very low prices since February now seem to have an impact on production levels around the world. In Brazil's top producer in particular, sugar production is shifting in favor of ethanol production. In addition, yields from the over-aged cane fields are lower.
At the South Center in Brazil, sugar production is estimated at 26 million tonnes in 2019/20, 26-27 million tonnes this season.
The EU will reduce its production to 17 million tonnes. Production had noticeably expanded after the abandonment of the sugar market regulation in 2017/18. Now, the sugar beet cultivation is being reduced again, because the production koten no longer be retracted.
In India too, production will fall again in 2019/20, after two years brought significant surpluses, which are now being sold on the world market. India is the largest consumer of sugar worldwide.
The ADM analyst calculates that the potential deficit of 2 million tonnes in 2019/20 can not effectively reduce the large overhang of 23-24 million tonnes in previous years. Especially since the consumption of sugar is falling worldwide. So far, the world sugar market grew 2% pa, now only 1-1.5% despite growing world population. As food manufacturers lower the sugar content in their products, the sugar market will probably remain under pressure in the foreseeable future.

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