Analyst Green Pool cuts global sugar surplus forecast for this season and next

LONDON (Reuters) - Analyst Green Pool on Thursday lowered its global sugar surplus forecast for the current 2020/21 season, primarily as it trimmed estimates for key producers India and Thailand.

FILE PHOTO: Workers spray fertilizer in a sugar cane field in Zacatepec de Hidalgo, in Morelos state, Mexico, May 31, 2017. REUTERS/Edgard Garrido

The Australia-based sugar and biofuels analyst also lowered its surplus forecast for 2021/22 as consumption is set to rise with the Covid-19 pandemic receding and with China consuming more sugar and less high fructose corn syrup (HFCS).

Green Pool now sees the 2020/21 surplus at 0.5 million tonnes, raw value, versus a late January forecast of 3.28 million. It sees the 2021/22 surplus at 4.08 million tonnes versus, 0.37 million tonnes less than its late January estimate.

“The current Thai crop (20/21) appears worse than in 19/20 (itself something of a disaster),” Green Pool said in a report.

It added: “India’s production is not as robust as we had earlier forecast, with our current estimate at 31.6 million tonnes (tel quel), but still higher than last year’s 27.2 million.”

Green Pool said world sugar production in 2020/21 is seen rising 8% to 186.72 million tonnes, from the low levels of 2019/20, when the analyst estimates the market recorded a deficit of 12.05 million tonnes.

Global sugar consumption in 2020/21 is forecast to edge up to 185.47 million tonnes, a gain of just 0.3%, partly due to COVID-19 impacts.

In 2021/22, Green Pool said consumption is expected to rise to 187.36 million tonnes, a 1% year-on-year increase.

“In this increase, we attempt to capture increased opening up as Covid vaccines are more widespread, and HFCS loses some market share in China.”

The analyst sees production in 2021/22 rising by 5.7 million tonnes to 192.4 million tonnes.

“We only forecast Brazil producing 35 million tonnes (tel quel in 2021/22), but we are aware this could rise if the relativity between the prices of sugar and ethanol continue to strongly favour sugar,” the analyst said.

Reporting by Maytaal Angel; editing by David Evans