The International Sugar Organization (ISO) has estimated the world sugar production higher in the 2022-23 season at 179.89 million tonnes (mt) even as it has projected a lower import demand and export availability.
ISO’s 0.87 per cent higher output projection is against 178.33 mt in 2021-22. Consumption for the 2022-23 season has been pegged at 180.22 mt compared with 178.02 mt, an increase of 1.24 per cent.
As a result, there will likely be a 0.34 mt deficit compared with 0.31 mt surplus in 2021-22.
However, sugar trade sees this as an improvement. This is despite end stocks being forecast 0.4 per cent lower at 100.67 mt compared with 100.71 mt a year ago.
On the other hand, import demand has been projected lower at 65.01 mt against 66.07 mt, while export demand has been pegged lower at 64.76 mt compared with 65.7 mt in 2021-22.
- Also read: Centre releases first tranche of domestic sale quota of 15 lakh tonnes of sugar for November
‘Prices will calm’
“The improvement in the global sugar stock situation, as indicated by the International Sugar Organisation in its recent report, will calm international sugar prices, which have been on the boil recently,” said Uppal Shah, Co-founder and CEO, AgriMandi.Live Research
Raw sugar prices touched a 12-year high on November 9 surging past 28 US cents per pound in the international market. Prices have eased a tad currently following the ISO estimate to 27.20 cents.
“We see sugar production improvement in Brazil which will help cater to world sugar demand, as India is not in the global market. The Government will continue the current restrictions on exports to meet domestic consumption demand and ethanol commitments,” Shah said.
Going forward crude oil prices will likely play an important role as it will determine Brazil’s production ratio between sugar and ethanol. “In the short term, I feel international prices will soften a bit,” he said.