World Sugar prices may hit 10-year low on production surplus

World Sugar prices may hit 10-year low on production surplus

World Sugar prices likely to hit 10-year low thanks to improved production prospects in the likes of the European Union and India, which have enhanced the prospects for a world output surplus, Abares, the official Australian commodities bureau said in its latest report.

Abares lowered by 2.0 cents a pound, to 13.0 cents a pound, its forecast for the average price of spot New York raw Sugar futures in 2017-18, on an October-to-September basis.

However, Abares said its outlook “reflects world Sugar production increasing at a faster rate than previously expected.

“Global supply is expected to grow faster than demand during 2017-18, leading to this significant fall in price,” Abares said.

Indeed, Abares raised by 2.8 million tonnes, to 5.8 million tonnes, its forecast for the rebuild in world Sugar supplies over 2017-18, reflecting in part a higher estimate for global production.

The upgrade was down largely to a 1million -tonne increase to “around 27 million tonnes” in the forecast for Indian output, thanks to a boost to yield prospects this year from better monsoon rains, and with a raised cane price lifting the output outlook too.-ompted by the removal of production quotas

Source:Commodity Online; Published on:20/09/2017