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Current Position:Home » News » General News » Topic

Platts Kingsman backs ideas of larger global sugar deficit

Zoom in font  Zoom out font Published: 2016-03-29  Views: 9
Core Tip: Sugar analysts are moving their ideas of the market deficit, the degree to which demand is outpacing supply, ever wider, citing the drought hit Asian crops.
 Sugar analysts are moving their ideas of the market deficit, the degree to which demand is outpacing supply, ever wider, citing the drought hit Asian crops.

“Things are looking tighter,” said analysis group Platts Kingsman, in a report seen by Agrimoney.com, as it upped its forecast for the sugar deficit in the year to September 2016.

Kingsman saw the deficit at a whopping 7.62m tonnes, a 2.48m tonne increase to its previous estimate.

“Fresh figures on the harvests in India, Thailand, north North East Brazil and Europe have caused most market participants to slash their production estimates because the dry weather has hit these crops more severely than previously thought,” Kingsman said.

But Kingsman did reduce its forecast for the 2016-17 deficit, by 2.3m tonnes, citing higher production expectations for Brazil’s Centre South region.

Indian production falls

Kingsman slashed its forecast for Indian sugar output, citing lower production in the key states of Maharashtra and Karnataka.

The sugar crop in these areas is mostly rain-fed, and India saw a deficient monsoon this year.

Kingsman now sees 2015-16 Indian sugar production at 25.6m tonnes, down from 26.6m tonnes previously forecast.

This would leave Indian output down by nearly 10% year on year.

Dry Thailand

Kingsman cut its estimate for 2015-16 Thai production by 600,000 tonnes, to 10.3m tonnes, and warned that “further cuts could follow”.

“A dry El Nino weather pattern across the grand growth phase of cane during the season has reduced agricultural yields and sugar recoveries across the country.”

The Thai government has officially declared seven out of 67 provinces as “drought-hit” this year, with water rationing in place across third of the country.

Early end to crush

“The latest crush figures from Thailand up to March 15 also played a large part in us re-visiting our production estimates,” Kingsman said.

Raw sugar production so far is down 4% year on year, with daily crush rates in latest week down 32%.

“The steep decline in the crush rate is a clear sign of a sharp tail to the crush in Thailand because of lower cane yields,” Kingsman said.

“Speaking to the trade, we understand that one of the biggest groups has already shut two of its units while 10 units across the country have ended crushing for this season.”

And this low Thai production is likely to continue, Kingsman said.

“The fall in yields will likely be repeated next season because much of the plant cane sown during the July-October monsoon season has received less water for vegetative growth.

Green Pool widens deficit as well

On Wednesday Green Pool boosted its forecast for the 2015-16 deficit to 6.648m tonnes, compared to an earlier estimate of 4.143m.

“It has been the Asian region cane crops that have disappointed most, falling sharply through the harvest,” said Green Pool.

“This is largely due to the impact of El Nino on the 2015-16 cane crop.

And Green Pool boosted its forecast for the 2017-18 crop year as well, by 780,000 tonnes to 4.95m tonnes, citing the ongoing effects of El Nino.

Ealier this month FO Licht raised its forecast for the 2015-16 sugar deficit to 7.2m tonnes, while Rabobank saw it at 6.8m tonnes.
- See more at: http://ingredientnews.com/articles/platts-kingsman-backs-ideas-of-larger-global-sugar-deficit/#sthash.y2ztrDPv.dpuf
 
 
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