Kingsman cuts global sugar surplus estimate by 13% to 9.161 million tonnes in 2011/2012 crop year on small crop in Brazil; global sugar output projection down to 173.24 million tonnes from May estimate of 176.33 million tonnes
September 7, 2011
– Global consultancy firm Kingsman SA reduced its global sugar surplus projections 13% to 9.161 million tonnes in the 2011-2012 crop year on a smaller-than-expected crop in Brazil, The Financial Express reported Sept. 7.
Kingsman also brought down its 2011-2012 global output and consumption forecasts on mounting concerns over the effect of frost on crops in central and southern regions of Brazil. The surplus figure could be cut again based on cane harvests in key growing nations, the firm said.
The global output estimate was reduced to 173.24 million tonnes from the May forecast of 176.33 million tonnes, while the consumption projection was cut to 164.08 million tonnes from 165.76 million tonnes, driven by concerns that demand will be affected by high prices and the current global slowdown, Kingsman said.
Yields in Center-South Brazil are still underperforming and there is discussion of a “sudden death to the harvest,” Kingsman Managing Director Jonathan Kingsman said. Uncertainty surrounding production in Thailand, China, and the whole of East Africa is also weighing on forecasts, Kingsman added.
The shortfall in the Center-South Brazil crop will keep the world raw sugar market tight for the next six months, and additional reduction in production should put the raw trade flows into deficit, Kingsman said.
Benchmark raw sugar futures in New York hit a six-month high of 31.85 cents per pound in August, while October raw sugar futures on the InterContinental Exchange remain elevated amid worries surrounding Brazil’s crop.
China may require 3 million tonnes of sugar imports in 2011-2012 as the country deals with a drought, while Brazil may offer tax incentives to produce ethanol at sugar’s expense, the firm said.
The primary source of this article is The Financial Express, New Delhi, India, on Sept. 7, 2011.