Sugar Prospects

World consumption is expected to increase to 257 million tons raw value from 168 million b 2030, driven by rising demand in the developing world, with the overall sugar market almost doubling in that time.

F.O. Licht, the German-based analyst said about global sugar production: “The after effects of the financial crisis and nearly three years of low sugar prices between 2006 and 2009 could make their presence felt next year, as the replanting ratio in Brazil has fallen,” Licht added: “This could lead to a reduction of the volume of cane suitable for sugar production, which in combination with lower fertilizer use could lead to falling Brazilian sugar production next year, which would be for the first time in 11 years.” World beet sugar production will fall to 32.7 million tons in 2010/11, down nearly 1.3 million tons from last year’s 34.0 million as yields in the EU return to average from last year’s record levels, Licht said.

Brazil

Brazil’s main centre-south 2010-11 sugar output reached 27 million tons as of Sept. 30, the Sugarcane Industries Association, or Unica, said Thursday. Mills in Brazil produced 30.1% more sugar than the same period a year earlier in the centre-south region, which accounts for 90% of the country’s cane crop, the trade association said in a statement. Unica also said Brazil’s centre-south sugarcane region crushed 444.5 million tons as of Sept. 30, up 17.3% from the same period a year earlier. The association in August trimmed its annual crush estimate to 570 million tons for the full year from its estimate in March of 595 million tons as a result of damage caused by a prolonged drought from May through to August. The region’s total ethanol production reached 20.3 billion litres as of Sept.30, up 22.6% from the same time a year earlier. Industrial yields, known as ATRs, are at 142.1 kilograms per tonne of cane, up 7.4% at the same period last season, due to the long dry spell earlier in the season.

Meanwhile, Brazil’s sugar output for the 2010-2011 crop season is expected to reach 40.5 million tons, according to Stefan Uhlenbrock, a commodities analyst for consultancy F.O. Licht. He also said sugar production for this season should be on a par with last season, but there could be a fall in the 2011-2012 crop season in Brazil due to prolonged dry weather. He spoke to Dow Jones Newswires on the sidelines of a conference in Sao Paulo. The possible fall next year is unlikely to be drastic but will lead to a slight decrease in sugar output, he said. Ulenbrock said world sugar prices could test the 30 U.S. cents per pound mark against the Mar11 sugar contract on ICE in the near future. Datagro released a report today projecting Brazil’s 2010-2011 output at 34.3 million tons, and the main crush at 574.8 million tons. Ethanol output for 2010-2011 was pegged at 27.8 billion litres.

India may have 3 million surplus

The Director general of the Indian Sugar Mills Association told local press sources that the country could have up to 3 million tons of surplus sugar for exports in the current marketing year, thanks to a larger crop and carryover stocks. The quantity includes about 1 million tons that the government has agreed to allow for export to meet an old obligation against tax-free imports of raw sugar. He added that he expected sugar output to reach 25.5 million tons and that opening stocks would be 5.8 million tons.

Russia

Russia harvested 11.9 million tons of sugar beet to October 12 on 541 100 hectares, or 52.4% of the total area to be harvested, with an average yield of 22.07 tons a hectare, the national sugar producers’ association Soyuzrossakhar reported during the month, quoting information received from the Agriculture Ministry. The amount of beet harvested to date was 2.2 million tons less than on the same date last year and the average yield was 7.56 tons less than a year ago. Soyuzrossakhar has forecast the beet harvest this year at 26.8 million tons with an average yield of 25.9 tons a hectare, compared with 26 million tons and an average yield of 32 tons a hectare in 2009. Soyuzrossakhar said Russia was likely to produce between 3.0 million and 3.1 million tons of refined sugar from domestically harvested beet this year, compared with 3.2 million tons in 2009.