I.S.O. sees global sugar balanced in 2014-15

by Ron Sterk
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STOWE, VERMONT — Global sugar supply and demand may come into balance next year (2014-15) after four years of oversupply, Jose Orive, executive director of the International Sugar Organization, said at the International Sweetener Symposium on Aug. 4.

Lower production in some key countries and increasing consumption will result in a near balance of sugar output and demand, Mr. Orive told symposium attendees. That follows a global surplus of 4.4 million tonnes in the current year, the result of production near 181.1 million tonnes and consumption of 176.7 million tonnes. Production and consumption both are expected to be near 181 million tonnes in 2014-15 as production eases slightly but consumption continues a steady 2% growth rate.

“This will bode well for sugar prices,” Mr. Orive said.

But the global stocks to consumption ratio will remain above 40% for another year due to the accumulation of four seasons of surpluses, Mr. Orive said.

The I.S.O. executive said sugar output in top-producing Brazil would decline slightly in 2013-14 and in 2014-15 but rise again in 2015-16, with sugar exports following the same trend. He noted that sugar production in Brazil has not expanded in the past five years after rapid growth in the prior decade.

Sugar production in India is expected to decline slightly this year, but the government has increased payments to producers to encourage production next year, with changes in monsoon rainfall also a factor.

Mr. Orive said sugar demand will increase by 20 million tonnes by 2020, with growth in Asia leading the market and accounting for 50% of world consumption, compared with 40% today and 25% in 1980.

“This is bullish for the world market,” he said. Increased demand will be met by higher production in Brazil, India, Thailand, Australia and a “conglomerate of medium and small producers,” he said.
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