Sugar: World Markets and Trade. May 2013 June 3, 2013
Gap Narrowing Again Between Global Sugar Production and Consumption
Global sugar production for 2013/14 is forecast at 175 million (metric) tons, narrowly setting a record with growth in Brazil and Thailand more than offsetting sharply lower production in
India. International raw sugar prices are at levels not seen in nearly three years with prices less than half the peak set in February 2011. Low prices are expected to stimulate global consumption and trade, with exports forecast 4 percent higher at 59 million tons.
2013/14 Forecast Overview
U.S. production is forecast at 7.8 million tons, down 392,000 from the previous year, on smaller sugar beet area and a return to trend for sugar beet and sugarcane yields. Imports are forecast up nearly 500,000 tons with Mexico as the top supplier and imports under the tariff rate quota (TRQ) reflecting U.S. commitments to import raw and refined sugar. Consumption is up slightly, while ending stocks are 4 percent higher at over 2 million tons.
Brazil’s production is forecast at a record 40.4 million tons, up 1.8 million on higher yields as a result of good weather and adequate sugarcane renewal. Record exports are forecast at 29.3 million tons despite millslikely expanding ethanol production to fill a domestic increase in the ethanol content blended with gasoline. The share of the sugarcane crop for sugar is down slightly to 48 percent, as opposed to an even 50/50 sugar to ethanol split the prior year. China is Brazil’s top market, though rising exports to the United Arab Emirates, Algeria, Indonesia, Russia and India are expected to continue.
Thailand’s production is forecast to rebound 600,000 tons from last season’s drought to a record 10.5 million. Consequent to larger supplies, exports are forecast to increase to a record 8.5 million tons on growing Asian demand, particularly in Indonesia. Also, consumption continues to trend higher, driven by growing household and industrial use.
India’s production is forecast 2 million tons lower to 25.3 million due in part to lower sugarcane yields. Also, processors are expected to divert more sugarcane from centrifugal sugar to gur, a crude non-centrifugal lump sugar, in response to rising gur prices. Declining production and low world prices are expected to push imports higher to 1.5 million tons to augment supplies for the world’s largest sugar consumer. Exports are expected to remain at 600,000 tons. On April 4, the
Government deregulated sugar sales and eliminated the levy on sugar mills, giving the industry more flexibility to react to market dynamics.
EU production is forecast to rebound slightly to 15.9 million tons on higher yields, most of which will be added to ending stocks. Consumption is steady at 18.1 million tons, nearly unchanged over the last several years. Imports are forecast to remain at 3.8 million tons while exports, limited by the EU’s WTO sugar export ceiling, remain unchanged at 1.5 million tons.
China’s production is forecast at 14.1 million tons, up marginally on better than average yields.
Consumption continues to rise, stimulating imports that are expected to exceed the 1.95 million ton TRQ for the fourth consecutive year.
Mexico’s production is forecast at 6.2 million tons, down 348,000 on lower yields. With consumption forecast to rise, both exports and ending stocks are expected to decline.
Mexico remains the largest exporter to the United States.
Russia’s production is forecast to decline slightly to 4.9 million tons. Last year’s sugar beet crop was greater than demand, resulting in a significant portion not being processed. Low world prices and high global stocks have reduced incentives to invest in the sector. To meet domestic demand, imports are forecast to jump 300,000 tons to 1.0 million.
Australia's production is forecast to increase 300,000 tons to 4.5 million, with a matching rise in exports. For the first time, the TRQ of sugar to the United States may not be filled due to higher shipments to Asia in response to relatively higher regional prices. Consumption, virtually unchanged during the last decade, is forecast flat