*By Ziad P S : *Buoyed by higher prices, global sugar production is expected to register modest growth in 2010-11 season as farmers in major growing countries increase production to make profits.
According to Australian Bureau of Agricultural and Resource Economics (ABARE), the global sugar production is forecasted to touch a record level of nearly 173.8 million tonnes in 2010-11, more than around 13.8 million tonnes in 2009-10 harvest. As per reports, the data of sugar production estimation, on the basis of acreage, across the globe have quoted steady except in European Union, where the production is expected to decline on the assumption of a return to normal beet sugar yields following the very high yields achieved in 2009-10. Meanwhile, the global sugar consumption is also likely to compete with the production with a projected increase by 2.1% to 170 million tonnes in 2010-11. Industrial experts said the pace of sugar consumption is higher than previous years. The consumption forecast rate of growth is higher than the estimated 1.3% increase in 2019-10, when high world sugar prices dampened growth in consumption. Nevertheless, relatively high sugar prices in 2010-11 are expected to keep growth of world sugar consumption below the 10-year average of 2.7%. ABARE noted that the sugar stockpiles are expected to increase in 2010-11, citing projected spurt in the global production. The sugar stocks are estimated to move up by 4.2 million tonnes to 58.7 million tonnes by the end of 2010-11 as compared to last year. Despite this recovery, the world stocks to use ratio for sugar at the end of 2010-11 will still only be 34.6%, compared with the average of 39.7% for the 10 years ending 2009-10. It is this low level of world sugar stocks that will keep world sugar prices at relatively high levels in 2010-11. The global prices for sugar have moved sharply up in the recent months due to inadequate supply triggered by the lower production. Meager sugar stocks halted the supply in the recent months, which caused to boost the prices in the global market, said an expert. Commenting on the current sugar scenario, Sudhir Bhongle, a veteran journalist from sugar land Maharashtra informed that imports of sugar had become costly, due to which the prices hovered at a higher end in the domestic markets. “Imported raw sugar cost us nearly Rs.34 per kg, which after processing and transportation cost turns out to be Rs.38-39 per kg for the millers. Then after entering into the retail market, the sweetener becomes further costly.” According to Bhongle, India’s annual per capita sugar consumption is estimated to be at 20 kg. “In this case, rise in sugar prices does affect the household budget, but there is no need for such hue and cry over the sugar prices, which the country had witnessed in past few weeks. Sugar should not be treated as an essential commodity like salt.” *Sugar Output Outlook in key growing countries* The sugar production in Brazil, the largest sugar producer in the world, is forecast to increase by 3.5 million tonnes in 2010-11 (October to September) to a record 45.1 million tonnes. This forecast covers production in the second half of the 2010-11 Brazilian crop years (April to March) and the first half of the 2011-12 Brazilian crop year. Brazilian cane production in the 2010-11 crop year is forecast to increase by 10% and the sugar share of cane production is forecast to increase by 1.3 percentage points to 44.7%. Sugar yields per tonne of cane are assumed to return to more normal levels following the overly wet Brazilian harvest in the second half of 2009-10. In the 2011-12 crop year, Brazilian cane production is forecast to increase by a further 8%. However, the sugar share of cane production is forecast to decline to 43.9%, as a result of forecast higher ethanol production, which is in line with expected lower world sugar prices and higher world oil prices. Indian sugar production is forecast to recover to 25 million tonnes in 2010-11, which is 6.3 million tonnes higher than in 2009-10. This forecast is based on normal rainfall being received during the 2010 Indian (or south-west) monsoon. At this stage, the Indian Department of Meteorology is forecasting rainfall from the 2010 monsoon to be 98% of long-term average rainfall, compared with 81% experienced in 2009. The monsoon started on 31 May 2010 over Kerala in the south-west of India. Australian sugar production is forecast to increase by 2% in 2010-11, to 4.6 million tonnes, as higher cane production is expected to more than offset lower sugar yields. Australian cane production is forecast to increase to 33.8 million tonnes in 2010-11, compared with 31.4 million tonnes in 2009-10. In the European Union, the area of sugar beet harvested in 2010-11 is forecast to be down 2.7% compared with 2009-10 and beet sugar production is forecast to be 7% lower. This forecast is based on the assumption of a return to normal beet sugar yields following the very high yields achieved in 2009-10. However, beet sugar production in European Union in 2010-11 is expected to again exceed the European Union guaranteed price quota, this time by around1.47 million tonnes. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
