According to market analyst Platts / Kingsman, global sugar production in 2018/19 will exceed demand by 12.59 million tonnes. This was announced yesterday in a presentation at the New York Sugar Week.
This increases the sugar surplus since the last Platts estimate, which was still at 11.05 million tonnes. Now the biggest annual surplus since 2006/07 is expected. That adds to this year's (2017/18) surplus of 11.46 million tonnes. This was last estimated by Platts with 9.24 million tons.
The increase in production comes primarily from India, where once again a large surplus is generated. India could catch up with Brazil or even surpass the South American country. That would be unique in history.
Indian production is estimated at 35.325 million tonnes of raw material in 2018/19; this year (2017/18) it is 33,696 million tons. Since the US data collection on this market in 1959/60, it would be the largest sugar production in India.
Brazilian production is estimated at 33.5782 million tons. According to Platts, Thailand will produce 14.928 million in 2018/19Tons also a huge amount of sugar.
Because of the large surpluses, sugar prices are trading at their lowest level since 2015 and the margins of the world's largest sugar cane processors are falling. In 2015, the processors' remuneration was already at the low level of 10.13 per kilogram, which already hurt the companies considerably, now threatens margins in the single digits. An improvement is in sight at the end of 2019 or early 2020 at the earliest.
Text: HANSA Derivatives Trading GmbH / 
