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The
world sugar economy is facing a second consecutive year of a
significant gap between world consumption and production. The
first revision of the world sugar balance for October 2009 to
September 2010 puts world production at 159.887 mln tonnes, raw
value, up by 6.911 mln tonnes or 4.5% from the last season. A
forecasted limited growth in sugar output in Brazil, a modest
production recovery in India after last season’s unprecedented
shortfall, and a higher sugar crop in the EU have become the
three major supply features of 2009/10. World consumption is
expected to grow at a rate significantly lower than the
long-term 10 year average (1.71% and 2.66%, respectively). The
lower growth is attributed to impacts of the 2008/09 global
recession on sugar consumption growth rates in developing
countries as well as soaring world market prices. Even so,
global use of sugar is expected to reach 167.134 mln tonnes.
Therefore, the growth in global production is far too small to
cover sugar consumption and the world statistical deficit is
expected to reach 7.247 mln tonnes as against 8.404 mln tonnes
projected in September, 2009.
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 |
159.887 |
152.976 |
6.911 |
4.52 |
| Consumption |
167.134 |
164.316 |
2.818 |
1.71 |
| Surplus
/ Deficit |
-7.247 |
-11.340 |
|
|
| Import
demand |
52.072 |
48.180 |
3.892 |
8.08 |
| Export
availability |
52.079 |
48.250 |
3.829 |
7.94 |
| End
Stocks |
53.471 |
60.725 |
-7.254 |
-11.95 |
| Stocks/Consumption
ratio in% |
31.99 |
36.96 |
|
|
|
Source:
ISO
quarterly market outlook, November 2009 |
SUGAR ABROAD
BRAZIL
In
late November, UNICA released an update on the progress of
Brazil‘s Centre-South 2009/10 harvest to 15th
November. Cumulative sugar production to 15th
November reached 26.181 mln tonnes, tel quel, up 9.82%
year-on-year. Ethanol production during the same period amounted
to 20.412 bln litres, down 5.46% on the year-ago level. A much
higher proportion of cane has been allocated to sugar compared
to last year, or 44.03% relative to 40.30% in the year-ago
period. Of importance, about 15%, or 40 sugar and ethanol mills
in the Centre-South, are expected to crush through the
January-to-March inter harvest period. Brazilian sugar exports
in November reached 2.478 mln tonnes, 10% higher than in October
and only marginally down on the record 2.5 mln tonnes exported
in September. A total of 1.85 mln tonnes was exported as raws
and 0.63 mln tonnes as whites.
EU
According
to the association of German sugar producers WVZ, the country is
expected to produce 4.11 mln tonnes of sugar this season, up
from 3.7 mln tonnes last year. A rise is attributed to a 4.3%
increase in beet area as well as higher sugar content.
AUSTRALIA
According
to the Queensland Cane Growers Organisation Ltd, which
represents most of
Australia
's cane-growers, sugar production could rise 10% next year as
farmers plant more area in response to a doubling in world sugar
prices this year. Commonwealth Bank of Australia Ltd expects
national production to rise 6.5% next year due to a projected
5-7% increase in cane area.
THAILAND
Mitr
Phol Sugar,
Thailand
's biggest sugar miller, plans to expand its crushing capacity
over the next two years in response to high world sugar prices.
In
Thailand
only, the company’s crushing capacity is expected to rise to
13 mln tonnes of sugarcane next year, up from 11.8 mln tonnes
this year.
GUATEMALA
According
to the national sugar producer's association Asazgua, the
country exported 1.37 mln tonnes of sugar in 2008/09, 2.6% more
than in the previous cycle. In October alone
Guatemala
exported 145,000 tonnes, more than four times the amount shipped
in the same month last year.
CHINA
The
domestic sugar production in the 2009/10 season is expected to
rise 3% from the previous season's 12.43 mln tonnes. The China
Sugar Association puts sugar consumption at 13.9 mln tonnes, up
3% from the previous season. The central government plans to
release 0.5 mln tonnes of white sugar from state stockpiles in
order to control surging domestic prices. The government has not
officially announced the size of the state's white sugar
reserve, but local analysts have estimated them at 2.3-2.6 mln
tonnes.
RUSSIA
A
significant increase in imports is expected in 2009/10 as
Russia
’s sugar stocks are depleted. Last season, due to a sharp
increase in the cost of import financing, purchases from the
world market fell dramatically. During 2008/09
(October/September), raw sugar imports reportedly decreased to
1.645 mln tonnes only from 2.678 mln tonnes in 2007/08. The
volume of imports was not high enough to cover the gap between
domestic production and consumption estimated at 2.375 mln
tonnes. As a result, about 0.8 mln tonnes of sugar from stocks
had to be used, reducing the stocks/consumption level to below
15%. In the new season, consumption is expected to exceed
domestic output by 2.825 mln tonnes, and stocks are low. So,
most of the gap has to be covered by imports. At present, the
ISO forecasts the new season’s overall import demand
(including imports of about 200,000 tonnes of white sugar from
the neighbouring FSU countries) at 2.650 mln tonnes, raw value.
PAKISTAN
In
2009/10,
Pakistan
is expected to buy more sugar from the world market than in the
previous season. Reportedly, the government has decided to
import 0.50 mln tonnes of raw sugar and 0.50 mln tonnes of white
sugar to meet a shortfall in domestic output in
2009/10(November/October). Last season the country imported an
estimated 330,000 tonnes
only.
BANGLADESH
According
to the Bangladesh Sugar and Food Industries Corporation, 15
state-owned sugar mills will produce around 100,000 tonnes of
sugar in the upcoming 2009/10 (November/October) sugarcane
crush, up from 75,000 tonnes in the previous season. That will
lead the country to import around 1.1 mln tonnes of raw sugar in
the current fiscal year to June 2010 to meet domestic demand of
some 1.2 mln tonnes of refined sugar.
INDONESIA
As
reported by Indonesian Sugar Refiners Association, the industry
is planning to build 15 sugar mills and develop at least 300,000
hectares of sugar cane plantations over the next five years in
order to end its dependence on imports. According to the
Ministry of Agriculture, in 2010 sugar output is seen rising
8.6%, to 2.9 mln tonnes in 2010, from 2.67 mln tonnes in 2009,
as a larger area is expected to be planted with sugar cane.
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