PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 17:02 UK, 7th Jul 2014, by Agrimoney.com
'Sudden death' fear prompts sugar deficit upgrade

Platts Kingsman raised its estimate for the world sugar production deficit next season, citing the threat of a "sudden death" finish to the Brazilian cane crushing season.

The respected analysis group raised to 2.094m tonnes, from 239,000 tonnes, its forecast for the shortfall in world sugar production behind consumption in 2014-15, starting in October.

The revised figure - which contrasted with Kingsman's initial forecasts, in February, for a 2.1m-tonne surplus for the season reflected deteriorating expectations for the drought-hit cane crop in Brazil's key Centre South region, responsible for some 90% of Brazilian output.

The Brazilian Centre South cane crop will come in at 570m tonnes, the analysis group said, a drop of 10m tonnes on its previous estimate, and down some 26m tonnes year on year.

'Run out of cane'

Brazil's cane producers are "increasing the pace" of harvest, said Claudiu Corvig, senior analyst agriculture at Kingsman, with the dry spell generally seen as sparing the region's farmers the setback of rain delays to fieldwork.

However, the "fear is that they run out of cane by the end of" the region's cane harvesting season, which winds down in the last quarter of the calendar year, Dr Corvig told Agrimoney.com.

"The main part of out revision relates to the fourth [October-to-December] quarter."

Indeed, lower cane yields, coupled with a strong pace of harvest, increase the risk of the Centre South encountering a "possible 'sudden death'  to the harvest", the consultancy said.

The Centre South will produce 32.2m tonnes of sugar in 2014-15 (on the region's local April-to-March crop year) down some 1.8m tonnes on the previous forecast, with some 23m tonnes available for export, including about 20m tonnes of raw sugar.

For 2013-14, exports were 25m tonnes, including some 22m tonnes of raw sugar.

Deficit, or surplus?

Kingsman's revision to its estimate for the world deficit also included some minor revisions for Africa and Asia, although the estimate for output in Thailand, the second-largest exporter, was left unchanged at 10.2m tonnes.

For India too, the Swiss-based group kept its output estimate unchanged, at 25m tonnes, but acknowledged that the progress of the monsoon could alter production by 1m tonnes in either direction.

The increased estimate for a world production shortfall, however, contrasts with an upgrade by ED&F Man last week to 2.8m tonnes in its forecast for a global output surplus.

KIngsman estimates at 4.798m tonnes the world sugar surplus for 2013-14, on an October-to-September basis, the fourth successive year when output has exceeded consumption, to an aggregate level of some 32m tonnes.

RELATED ARTICLES
Talk of decent Brazil coffee harvest dents prices
India 'may take centre stage' in sugar markets
Hedge funds sweeter on ag prices, led by sugar
LINKS
Agricultural Commodities
Agricultural Markets
Agricultural Companies
Agricultural Events