The global sugar surplus in the 2013-14 season will be 12 percent smaller than initially estimated as leading producer Brazil, Russia and the European Union have smaller-than-forecast crops, said Kingsman SA.
Sugar output will be 4.9 million metric tons higher than demand in the 12 months starting Oct. 1, down from a previous forecast of 5.6 million tons, the Lausanne, Switzerland-based unit ofMcGraw-Hill Financial Inc. (MHFI)’s Platts said in a report e-mailed today. On a national crop year-basis, which begins when the harvest starts in each country, the surplus was reduced by 27 percent to 4.6 million tons, data from the researcher showed.
Sugar production in Brazil will be 3.1 percent smaller than the previous estimate at 34.4 million tons as millers there use more of the raw material to make ethanol, Kingsman said. Output in the EU will be 16.9 million tons, 600,000 tons less than previously forecast, it said. In Russia, production will be 5 percent smaller than previously thought at 4.35 million tons.
“The EU is due to the late beet sowings” that resulted from cold weather this year, Fabienne Pointier, an analyst at the company, in said by phone from Lausanne today, ahead of the company’s Asia Pacific Sugar Conference in Singapore on May 27-28. “Brazil center south is a decrease due to the ethanol market that is much more attractive at the moment, but things could still change.”
Millers in Brazil will direct 45 percent of all the cane processed this year to making sugar, down from a previous forecast of 47.5 percent and 49.5 percent a year earlier, according to the report. The rest will be used for ethanol. The South American country will harvest a record 585 million tons of cane, 10 million tons higher than the previous estimate.
“Nearly perfect weather for cane development during the intercrop season led to an increase in expected agricultural yields to roughly 80 tons per hectare,” Kingsman said. A hectare is 2.47 acres.
Global sugar production will be 177.9 million tons in the 12 months starting in October, the researcher estimates. That compares with a previous forecast of 178.5 million tons and with 182.2 million tons in 2012-13. Consumption in the period will be little changed from the earlier estimate at 172.95 million tons. In 2012-13, demand is forecast at 170.4 million tons.