A forecast sugar surplus that drove the price down the most in a decade last year won’t push rates lower as consuming countries rebuild stockpiles of the sweetener, according to Copersucar SA (COPR3).
Raw sugar will trade between 24 cents and 26 cents a pound until July, Paulo Roberto de Souza, chief executive officer of Copersucar SA, a trading and producers’ cooperative based in Sao Paulo, said in an interview at the Kingsman sugar conference in Dubai today. The current season will have the first surplus after three years of deficits, he said.
“A possible surplus of 5 million to 7 million metric tons for a market of 150 million tons is very small,” de Souza said. “The surplus should not affect prices too much because there will be a rebuild, if not complete at least partial, of stocks. It’s natural that we will see stocks rebuilding inIndia and other consuming countries.”
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India is the world’s largest consumer of sugar. The country’s demand will be 22 million tons in the current season, Abinash Verma, director general of the Indian Sugar Mills Association, said in his speech at the conference yesterday. China may import as much as 3.5 million tons this year, higher than the market is currently anticipating, de Souza said.
The forecast surplus will not be enough to bring the global stocks-to-use ratio to the historical level of 35 percent to 36 percent, after three consecutive years of deficits “dried up the pipeline,” Copersucar’s de Souza said.
