February 26, 2015
Sugaronline | http://goo.gl/8KtOFk
The International Sugar Organization on Wednesday said the sugar market will be roughly in balance this year, with only a small surplus, but still expects the market to swing to a deficit in 2015/16, according to Dow Jones.
The London-based organization expects a supply surplus of 620,000 metric tonnes in the year that began Oct. 1, up from its previous forecast of 473,000 metric tonnes in November.
The ISO is expecting a record production level in the 2014/15 crop year, with world sugar production pegged at 172.1 million tonnes, up 0.6% from last year.
"Record high production is expected despite projected lower crops in several leading world sugar producing countries including Brazil, China and Thailand," the ISO said in its third assessment of the 2014/15 market. Production in India and the European Union is seen higher than previously expected.
World consumption, meanwhile, is expected to hit 171.5 million tonnes, up 1.8% from last year.
ISO said it still sees the market swinging to a supply deficit for the first time in six years. Back in November, the group projected production to fall short of demand by 2 million to 2.5 million metric tonnes of sugar in 2015/16. That projection will be updated in its next report in May.
But the agency said the market impact may not be felt until the huge stock levels come down. Global stocks of the sweetener are expected to hit 79.885 million tonnes by the end of this crop year.
"Although the ISO still expects a return of a global deficit in 2015/16, any significant price recovery may be muted before a substantial reduction in the level of global surplus stocks occurs," ISO said on Wednesday.
London sugar futures turned south after the report. Sugar for March delivery was down $4.60 at $373.10 a metric tonne.