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The
second revision of the world sugar balance forecast for the
period from October 2009 to September 2010 shows a widening gap
between world consumption and global output. The world sugar
economy is facing the second consecutive year of a significant
gap between world consumption and production. World
production is
now put at 157.160 mln tonnes, raw value, up by 4.678 mln tonnes
or 3.07% from the last season. Generally sugar crops in the
world’s leading producing countries – with the exception of
the EU, Russia, and, probably, India – are now likely to be
lower than expectations at the beginning of the season. World
consumption is
expected to grow at a rate significantly lower than the
long-term 10 year average (1.48% and 2.66%, respectively). The
lower growth is attributed to soaring world market prices as
well as some lingering impacts of the 2008/09 global recession
on sugar consumption growth rates. The ISO does not anticipate
that the projected renewed global economic growth will
significantly stimulate sugar consumption in the course of
2009/10, particularly taking into account high world market
prices. Even so, global use of sugar is expected to reach
166.585 mln tonnes. Therefore, the growth in global production
is far too small to cover anticipated increases in sugar
consumption, and the world
statistical deficit is
expected to reach 9.425 mln tonnes as against 7.247 mln tonnes
projected in November.
A summary of the revised world sugar balance in
2009/10 is provided in the table below.
|
World
Sugar Balance |
|
|
2009/10 |
2008/09 |
Change |
| |
(mln
tonne, raw value) |
in
mln t |
in
% |
| Production |
157.160 |
152.482 |
4.678 |
3.07 |
| Consumption |
166.585 |
164.153 |
2.432 |
1.48 |
| Surplus
/ Deficit |
-9.425 |
-11.671 |
|
|
| Import
demand |
54.281 |
50.068 |
4.213 |
8.41 |
| Export
availability |
52.156 |
50.070 |
2.086 |
4.17 |
| End
Stocks |
53.068 |
60.368 |
-7.300 |
-12.09 |
| Stocks/Consumption
ratio in% |
31.86 |
36.78 |
|
|
|
Source:
ISO
quarterly market outlook, February 2010 |
SUGAR ABROAD
BRAZIL
Sugar
output in
Brazil
, the world’s biggest producer, will rise 17% this year as
drier weather will favour harvesting and after cane growers
increased planting. The rainy period in the Center South, where
about 90% of
Brazil
’s sugar is made, came before the harvesting season this year,
helping the plants develop. Last year excess rains during the
April-November season led mills to halt output several times
because humidity reduces sugar cane’s sucrose. Brazilian mills
will produce 38.7 million tons of the sweetener in 2010, up from
33.1 million tons last year, the ministry’s crop-forecasting
agency Conab, said. Mills will process a record 664.3 million
tons of sugar-cane into sweetener and ethanol, up from 604.5
million tons last year. Mills will process 54.6% of their cane
into ethanol and 45.4% into sugar.
EU
EU
sugar companies were among the largest beneficiaries last year
of
Europe
's Common Agricultural Policy (CAP) payments, according to
statistics made public recently by most EU member countries.
Each year there are special payments. For the 2009-10 period,
the sugar sector benefited from the aid for exporting. In
France
, in the year between October 2008 and 2009, three sugar
companies received the top subsidies: Tereos (117.9 million
euros), Saint Louis Sucre (143.7 million euros) and Cristal
Union (57.2 million euros).In
Spain
a sugar company also occupied first place, with Azucarera Ebro
receiving 119.4 million euros. The world's leading sugar company
Sudzucker came second in
Germany
's list with its 42.9 million euro subsidy. The CAP aid for
exports allows European exporters to remain competitive by
compensating for the EU's higher prices compared with world
markets. It is the second year running that EU countries have
had to publish by April 30 the full list of beneficiaries of CAP
payments, with the aim of using the information to debate the
future of the policy.
France
and
Britain
, which has delayed the publication of its list until after the
country's general election on May 6, are the two main
protagonists in the hotly debated reform of the CAP.
Britain
wants to put an end to direct subsidies, while
France
is fighting to retain them.
THAILAND
The
export availability in
Thailand
, the world’s second largest exporter, is likely to be further
reduced. In March, the Office of Cane and Sugar Board downgraded
the2009/10 crop projection to 6.8-6.9 mln tons of sugar, taking
into account a negative impact on cane by a serious drought in
the northern part of the country. As a result, sugar exports are
expected to drop to around 4.7 mln tons for the season, down
from 5.1 mln in 2008/09.
AUSTRALIA
Australian
sugar production in 2010-2011 is projected at 4.8 million tons,
a rise of 6.2% from 4.52 million tons in the previous season.
Sugar exports were pegged at 3.45 million tons valued at A$1.88
billion, compared with estimated exports this year at 3.25
million tons valued at A$1.80 billion. High sugar prices would
result in a 7% increase in the cane area harvested in
Australia
in 2010-11, reversing a decline that began in 2002-03.
GUATEMALA
Guatemala
exported 360,571 tons of sugar
in March, more than double the 176,206 tons exported in the same
month a year ago. Accumulated sugar exports for the 2009/10
season which began in November were 878,326 tons, up 79% from
the same period a year ago.
Guatemala
is exporting more sugar to
Mexico
, where the crop is expected to fall short. The Mexican
government opened a 250,000-tonne sugar import quota earlier
this year.
Guatemala
, the biggest sugar producer in
Central America
, is expected to produce 2.231 million tons of sugar this year.
INDONESIA
Indonesia
is set to import sugar as local
sugar mills are unable to meet growing demand. In 2009/10, all
sugar mills in the country could only produce 2.7 million tons,
while sugar demand was projected to reach 3.4 million tons. This
year sugar consumption has even been projected to run into 4
million tons with sugar output estimated at 2.7 million tons. It
is very difficult to raise sugar production to up to 4 million
tons and therefore sugar imports will be inevitable. It is
estimated that domestic sugar price would increase to more than
Rp9,000 (nearly US$1) a kilogram this year.
ETHIOPIA
The Ethiopian Sugar Development Agency is expected to sign an agreement on
April 27, 2010, with the UK based ED&F Man Sugar for the
supply of 40,000 tons of sugar. The company agreed to supply a
ton of sugar for 565.5 dollars. This is lower, by almost 300
dollars, than the price of the contract awarded to the
UK
company and Louis Dryfus of
Sweden
, four months ago, for the supply of 50,400 tons of sugar at 831
dollars per ton. The delivery of the sugar from the
UK
company is planned to arrive in May and June. In addition to
this, the agency will float a tender to buy 60,000 tons of sugar
next month.
UAE
The UAE is the world’s second
biggest re-exporter of cane sugar after
Uganda
, with a total of 15.1 million tons per annum, unveiled a recent
study by the Ministry of Foreign Affairs. It noted that the UAE is
ranked amongst the top ten white sugar exporting countries
globally and came in the fourth place, after
Brazil
,
Thailand
and
India
, with regards to its volume of exports of this commodity.
According to UAE data, sugar and sugar derivative exports
reached 63 countries around the world in the year 2009 with a
total value of approximately US$ 472 million and a growth rate
of 36.7%, compared with the year 2008. The value of the UAE’s
imports of Sugar and Sugar Derivatives reached approximately US$
225 million in 2009, down from 328 million (31.5% ) in 2008. The
majority of the imports into the UAE of this commodity shifted
from India in 2008, to Thailand in 2009.
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