USDA cuts global Sugar production forecast
Commodity Online | November 22 2019
UPDATED 14:26:58 IST

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Global sugar production for 2019/20 is estimated down 6 million tons to 174 million primarily due to the 5-million ton drop in India resulting from lower area and expected yields, the United States Department of Agriculture's (USDA) Foreign Agricultural Service (FAS) said in its latest report.

Brazil and India are essentially tied as top producers. Consumption is projected to continue to rise due to record use in India. Exports are estimated to be flat while global stocks are projected down 5 million tons to 50 million with lower stocks in China, India, and Pakistan, the report said.

Brazil’s production is estimated down slightly to 29.4 million tons due to more sugarcane being diverted towards ethanol production and less to sugar (35 percent of the total sugarcane output is expected to be used for sugar as opposed to 35.9 percent during the previous crop). Exports are projected to drop 1.0 million tons to 18.6 million representing the lowest level in the past 12 years. Exports have not been competitive against sugar (domestic consumption) and ethanol production (both domestic consumption and exports). Stocks are up 80,000 tons while consumption is up slightly.

India’s production is estimated to decline 5.0 million tons to 29.3 million due to lower area and yields. Consumption is estimated at a record, 28.5 million tons, due to a growing economy. Exports are estimated to reach 5.0 million tons as a subsidy is provided to cover marketing expenses such as handling, upgrading processing costs, and freight charges. Stocks are expected to be over twice the ideal requirement of 2 to 3 months and are pivotal to supporting higher consumption and exports in the face of lower production.

China’s production is estimated up for the fourth straight year, to 10.9 million tons, due to expanded cane and beet area. Imports are estimated lower based on anticipated draw-down of stocks and stricter border controls. Consumption is unchanged.