Sugar industry to face tighter market
The report, published by Rabobank's Food & Agribusiness Research and Advisory group, says that strong headwinds look set to impact the sugar industry, with abundant global sugar stocks continuing to weigh on world market prices.
Rabobank says that although prices have been under pressure for some time, projections suggest that world production in 2014/2015 will be little different from the previous year.
EU: EU production is forecasted at 18.6 million tonnes raw for the 2014/15 marketing year, a 12% YOY increase from 2013/14.
India: Forecast sugar production was revised up to 25.5 million tonnes, as a result of increased planting, and favorable monsoon rains.
Mexico: Sugar production in 2014/15 stands at 6.2 million tonnes raw value. Some downside risks remain due to the wet autumn's impact on yields.
Brazil: As the cane season draws to a close, Rabobank estimates Brazil's 2015/16 crop as between 550 million to 580 million tonnes.
U.S.: With a tight balance sheet, reduced beet crop and an ongoing trade dispute with Mexico, U.S. sugar prices have risen significantly and are expected to remain firm.
Australia: Production should reach 4.6 million tonnes this year. Below-average rainfall forecasts and the potential of an El Nino event raises concerns for 2015.
Indonesia: Indonesian sugar refiners are nervous. At the time of writing, the government has yet to allocate import quotas for 2015. Meanwhile, domestic production lags rocketing local demand.
Thailand: The 2014/15 crop is not expected do well. Sugar production is projected to be around 12% lower than last year's 11.9 million tonnes.
China: Yet another decline in sugar production level is expected to result in a 12% decrease in production versus the previous season. ■