Global sugar prices to remain near current levels as better output in the Northern Hemisphere offsets weaker Brazilian harvest, HSBC says
November 21, 2011
Global sugar prices should remain around current levels despite a drop in sugarcane production in Brazil, HSBC Global Research says, Bloomberg reported Nov. 21.
Brazil’s Center-South cane production will fall to 488.5 million tonnes in the 2011-2012 season that started in March, compared with 556.9 million tonnes last year, according to industry group Unica.
Production improvements in the Northern Hemisphere will help to offset a weaker Brazilian harvest, keeping sugar prices around current levels in the near term, according to HSBC Latin America agribusiness analyst Pedro Herrera.
Raw sugar is not likely to drop below 20 cents a pound, Herrera said, citing Brazil’s weak harvest, a low likelihood of unrestricted sugar exports from India, the world’s second-largest producer, and higher output costs.
Larger crops in the European Union, Russia, India, and the Black Sea region are putting supply above demand, and prices are set to weaken in the “medium term,” according to the bank.
The primary source of this article is Bloomberg, New York, New York, on Nov. 21, 2011.