(Adds forecasts for other countries, comments from analyst)
By Marcelo Teixeira
SAO PAULO, April 25 Global sugar production
should jump by 13 million tonnes in the 2017/18 crop year as the
European Union, India and Thailand increase their outputs,
independent consultancy F.O. Licht forecast on Tuesday.
World sugar output is expected to reach 190.3 million tonnes
compared to 176.9 million tonnes in 2016/17, causing the global
sugar market balance to turn into a surplus of 2.8 million
tonnes after two years of deficits, F.O. Licht projected.
The global sugar supply deficits of the last two years
elevated prices for the sweetener to the highest in 5 years at
above 23 cents per pound later last year. Values have been
falling since as the market already priced in a likely rebound
in production. Raw sugar futures were trading close to 16.2
cents per pound in New York on Tuesday.
F.O. Licht's chief analyst Stefan Uhlenbrock said he does
not expect prices to crash due to the jump in global sugar
output, because stocks are still at a low level following the
years of deficits.
"But the potential for sugar prices to increase have
diminished," he said during a presentation at an international
sugar and ethanol conference in Sao Paulo.
Brazil, the world's largest sugar producer, is not adding
much to the global surplus. Uhlenbrock said the country's top
cane belt will produce only 300,000 tonnes more sugar in 2017/18
than in the previous season, as mills' investments in the fields
Brazil's center-south should produce 35.9 million tonnes in
the new crop versus 35.6 million tonnes in 2016/17.
Large increases are expected from India and the European
Union, F.O. Licht said.
India is expected to produce 24.4 million tonnes from 20.3
million tonnes in the previous crop as the country recovers from
a drought last year, while the EU's output is seen at 18.4
million tonnes in 2017/18, almost 3 million tonnes more than in
Uhlenbrock said the end of European sugar quotas is behind
the large production increase.
(Reporting by Marcelo Teixeira; Editing by Chris Reese)