After two years of deficit, global sugar production has rebounded and the world sugar balance has moved back to surplus in the season 2017-18. It has risen sharply by nearly 10% to a record high of more than 185 million tons. This increase has come from production gains across India, European Union, Thailand and China. India sprung the major surprise registering a near 60% growth over the production figure of previous season. With a surplus of production over consumption of nearly 10.5 million tons, the global sugar prices are unsurprisingly on a southward spiral. ISO has projected a surplus production 6 million tons in the season 2018-19 with India tipped to become the largest producer of sugar in the world marching ahead of Brazil. This projected surplus is notwithstanding the fact that the production estimate in South Central Brazil being less by nearly 7 to 8 million tons.
Raw sugar prices which had reached the lowest since 2008 to around 10.50 cents per pound rebounded and traded between 22 and 23 cents per pound during September 2016 crashed thereafter and is presently hovering a little above 10 cents per pound. White sugar prices are a little above 300 USD per MT.
Recessionary forces are presently holding sway over the global sugar market. The prices seem to have factored the projected surplus of sugar production and resultant stock pile up during Sugar season 2018-19. There is no immediate prospect of any revival in the sugar prices and the gloom in the global sugar market has spillover effect on all sugar producing geographies.
B. K. Agarwal
(August 31, 2018)