22nd November 2021: The United States Department of Agriculture (USDA) bi-annual forecast on the global sugar market is upbeat for the current season, despite lower prior projections of global sugar exports and higher volumes of ending stocks (October 2021-September 2022). The USDA projected global sugar exports at 63.11 million ton (m) in its "Sugar: World Market and Trade" projection released last week, down from 65.95 m in May. The USDA's estimates, as well as those of Tropical Research Services (TRS), which predicts another year of deficit supply in the 2022-23 season, could maintain sugar prices elevated, if not higher.
A deficit in 2022-23
TRS put the shortage at 4.04 million ton, according to Thomson Reuters.
According to the USDA, export estimates have been cut because Brazil and Thailand are projected to ship 3.1 million ton and 445,000 ton less than expected. Raw sugar futures for delivery in March next on the Intercontinental Exchange in New York closed the weekend at 19.99 US cents a pound (33,030 a ton). Current global production predictions are lower than May expectations (181.08 m vs 185.53 m), albeit they are higher than last year's 180.12 m; an upward revision to consumption (174.54 m vs 174.44 m); and growing import projections are all considered as encouraging for the sugar market (54.22 m vs 53.63 m). The consumption from the previous season has been estimated.
The USDA has maintained its May predictions for Indian sugar production at 34.7 million tonnes, compared to 33.76 million tons last season. Domestic consumption is expected to reach a new high of 28.5 mt, unchanged from original predictions but 0.5 mt higher than the previous season. The USDA, on the other hand, has increased India's export forecast to seven million tonnes from six million tonnes previously. "Even without the subsidies that have boosted exports, exports are anticipated to be strong," the agency stated. Ending stockpiles are expected to be 14.37 million tonnes, down from early predictions of 16.57 million tonnes, but higher than last season's 14.17 million tonnes.
While India may be the sugar market's darling, Brazil will be a source of concern. Brazil's production is predicted to drop from 6.1 million tonnes to 36 million tonnes, down from 42.05 million tonnes. It's also less than the initial forecast of 39.9 million tonnes. "Due to dry conditions and frosts, it is expected that Brazil's production would decline. "Because of Brazil's prominence as a producer and exporter, this decline is projected to have a significant impact on global sugar availability and prices," according to the USDA. Because sugar prices are stable and lower than ethanol prices, at least 46% of Brazilian sugarcane may be converted to sugar and the balance to ethanol. Exports are likely to plummet by 26 Mt compared to last year.