PRESS ROOM
Expectations of a deficit fuelling sugar’s rally
Friday 10th September '21
Sugar prices are being driven higher by the prospect of lower sugar production in Brazil. After severe drought at the start of the year, followed by extreme frost in the Centre-South growing region in July, the volume of sugar cane in 2021/22 has been adjusted lower by the Brazilian Sugarcane Industry Association (Unica). Unica now envisages the volume of sugar cane to be around only 530mn tons compared to 605mn tons last year. Added to that, the world’s second biggest sugar producer India is considering withdrawing its sugar export subsidies from the new season beginning in October given the strong sugar prices. The lack of incentives for the next season could weigh on sugar exports from India. The International Sugar Organisation increased its sugar deficit estimate for the 2021/22 season to 3.83mn tons compared to the prior forecast of a deficit of 2.65mn tons. Global production is expected to increase marginally by 0.2% over the prior year to 170mn tons, while consumption is expected to rise by 1.6% versus last year to 174.5mn tons in 2021/22.