Green Pool backed growing ideas for the world sugar production deficit next season, with caution over Asian prospects more than offsetting the improved outlook for volumes for top-ranked Brazil.
The Australia-based consultancy lifted to 6.5m tonnes, from an estimate in March of 4.95m tonnes, its forecast for the shortfall in world sugar output behind demand in 2016-17.
The revision followed Monday’s upgrade by Platts Kingsman to 7.67m tonnes, from 6.38m tonnes, in its estimate for the global sugar output deficit next season.
Also this week, broker INTL FCStone pegged the shortfall at 7.8m tonnes.
Green Pool’s move came despite what it acknowledged as a “strong start” to the cane crushing season in Brazil’s Centre South region, responsible for some 90% of sugar output in the top producing country.
Data from cane industry group Unica this week showed that Centre South mills crushed 36.1m tonnes of cane in the second half of last month, a record volume for the period, helped by dry weather and the timely opening by mills for the new season, which began at the start of April.
Sugar output, at 1.81m tonnes, was up 71% year on year.
Green Pool pegged Centre South sugar output in 2016-17 at 34.2m tonnes, a rise of 3.0m tonnes year on year, reflecting in part an expectation of higher quality cane this time, and of mills turning more crop into sweetener rather than ethanol.
‘Casts a pall’
However, the Australia-based consultancy also highlighted “El Niño-induced reductions in Asian cane crops”, a reference to the unduly dry weather seen across much of the continent, and blamed on the El Nino weather pattern.
Green Pool flagged in particular the prospects for a return to a substantial output deficit, of 2.54m tonnes in 2016-17, in India, the second-ranked producing country, where the shortfall was flagged at a “tiny” 100,000 tonnes this season.
“India’s production of around 25.1m tonnes tel quel in 2015-16 is worse than most had thought earlier,” said Green Pool, which had in March pegged output at 25.9m tonnes.
“That casts a pall over the possible 2016-17 production, since [cane] planting was unable to be done in 2105 and may still be unable to be planted prior to the monsoon if El Niño lingers,” the consultancy said, cutting its estimate for 2016-17 output by 900,000 tonnes to 23.4m tonnes.
The dynamics spell the return of India, which has not seen a notable sugar output deficit since 2009-10, to being a net sugar importer of 850,0000 tonnes next season.
“India will need to import in order to maintain stocks,” after being a net exporter of some 1.1m tonnes in 2015-16.
India’s latest spell as a sugar exporter has proved somewhat tortuous, involving controversial subsidies for shipments, and most lately a compulsory order on mills to export excess supplies of the sweetener.
Current season forecasts
The impact of Brazil’s improved performance on the global data is also somewhat complicated by the South American country’s use of a different marketing year, April-to-March basis, to the October-to-September year used by many analysts.
Even so, Green Pool raised its estimate for the world sugar production deficit in 2015-16 too, to 8.51m tonnes, from an estimate in March of 6.65m tonnes.
The revision contrasts with a downgrade to 5.48m tonnes, from 7.67m tonnes, on Monday in Kingsman’s estimate for the world output shortfall in the current season.
“The overall deficit for the 2015-16 season (October-September) has been trimmed a little since our last report as higher production is expected in Brazil,” Kingsman said, adding that it had raised estimated for Guatemalan and Mexican output too.
FC Stone on Tuesday raised its forecast for the world output deficit in 2015-16 by 2.3m tonnes to 9.3m tonnes.
(Source – http://www.agrimoney.com/news/india-to-renew-sugar-imports-says-analyst-upping-world-deficit-outlooks–9564.html)