(Reuters) - The world sugar market is on course for a shortfall of 1.36 million tonnes (raw value), analyst Green Pool said on Friday in its first forecast for the 2019/20 season.
It also trimmed its projection for the global surplus in 2018/19 to 2.64 million tonnes from a previous forecast of 3.60 million.
There was a surplus of 19.60 million tonnes in 2017/18, it said.
Green Pool said it is “unusual” for the global sugar market to swing back to deficit after only two surplus seasons, but noted last year’s sharp drop in prices to below production costs curbed output.
“(The) size of the 17/18 crop year surplus...was so big that it was bound to force change quickly,” Green Pool said.
The expected shortfall in 2019/20 is mostly due to expected output reductions in Thailand, Pakistan and India, it said.
Green Pool pegged India’s 2019/20 production at 29.50 million tonnes.
“(We) anticipate that there will have been lower planting due to some dry weather post-monsoon in 2018,” Green Pool said. “Exports are lagging and stocks will undoubtedly finish the year high, continuing to pressure the government and mills.”
The country’s 2018/19 production was seen at 33.5 million tonnes, down slightly from a previous forecast of 34.1 million tonnes.
Output from Brazil’s centre-south cane region is expected to rise to 29.6 million tonnes in 2019/20 from an expected 26.6 million tonnes in 2018/19.
This marks a recovery from this season’s sharp decline, although drier-than-usual weather in December and January could dent production.
“This adds an element of risk to the 2019/20 crop, and perhaps also to the final figure for 2018/19,” Green Pool said.
Reporting by Ana Ionova; editing by Jason Neely