November 18, 2016 (Sugaronline) | https://goo.gl/0kp66F
World sugar inventories will fall to a five-year low by the end of the 2016/17 season, as consumption rises faster than production, according to Agrimoney.
The US Department of Agriculture saw sugar stocks falling by some 7.2 million tonnes in 2016/17, to 30.78 million tonnes.
This compared to a previous forecast of a 5.1 million tonne drop.
In September sugar analyst group Platts Kingsman forecast the sugar deficit in 2016/17 at 6.45 million tonnes, while Rabobank saw it at 7.5 million tonnes.
The decline in stocks will be led by sharp falls in India and China, where they are seen the lowest level since 2010/11, according to the US Department of Agriculture.
The USDA saw stocks in India falling to 6.3 million tonnes in 2016/17, down from 8.0 million a year ago.
In China, the stocks will fall to 2.6 million tonnes next year, compared with 3.2 million in 2015/16.
Sugar production in Brazil is forecast up 3.1 million tonnes year-on-year to 37.8 million on favourable weather and a higher percentage of sugarcane diverted towards sugar production instead of ethanol.
This is an upgrade of some 700,000 tonnes from the previous report.
Likewise, production in the European Union is also forecast to rebound 1.9 million tonnes to 16.2 million on higher sugar beet area.
These gains seen in Brazil and EU, are set to offset declines in India and Thailand.
India's production is forecast to drop 3.6 million tonnes to 23.9 million due to lower area and yield.
In Thailand production is forecast down 470,000 tonnes to 9.3 million, as "severe drought conditions during the growing stage are expected to lower yields," according to the USDA.
Overall, world sugar production in 2016/17 is expected up at 170.9 million, compared to 169.3 million a year earlier.
But higher consumption, expected at a record 174 million tonnes, is expected to counter any production increases and draw stocks down.
Consumption in India, the world's largest consumer, is predicted to rise to a record 27.2 million in 2016/17.
This year will mark the first time in seven years when India's production falls below consumption.
Consumption is estimated to rise in Russia, due to "expansion in production of home-made alcohol," said the USDA.