World 2017/18 sugar production, consumption seen at record: USDA

File photo: A worker poses for a photo in front of sacks filled with sugar at Emiliano Zapata sugar mill in Zacatepec de Hidalgo, in Morelos state, Mexico, March 7, 2015. REUTERS/Edgard Garrido

(Reuters) - The U.S. government forecast on Friday that world sugar production would reach 185 million tonnes in 2017/18, with consumption rising to 174 million tonnes, both record levels.

In its biannual report, the U.S. Department of Agriculture (USDA) said record production was due in part to a record harvest in top grower Brazil, pegged at 40.2 million tonnes, up 1.1 million tonnes from the prior year.

Also boosting global output are recoveries in India and Thailand due to favorable weather, the end of production quotas in the European Union, and the expansion of planted areas in China, the USDA said.

Global ending stocks were forecast to rise 5 percent in 2017/18, with higher inventories in the European Union and India more than offsetting lower stocks in China, the report said.

Indonesia was expected to have surpassed China as the world’s top sugar importer in 2016/17, with growing imports from Brazil.

“It is not because of new demand but because China is yielding the spot following its policy changes,” the USDA said, pointing to higher production and tighter government control over imports.

India’s harvest was forcast to rise 25 percent year-over-year to 27.7 million tonnes.

Sugar output in the United States was forecast at 8 million tonnes, down from 8.1 million tonnes in 2016/17, with imports seen rising 14.3 percent to 3.4 million tonnes. Mexico was expected to supply nearly half of U.S. sugar imports in 2017/18, the USDA said.

Reporting by Marcy Nicholson in New York; editing by Sandra Maler and Jonathan Oatis