LONDON (Reuters) - The International Sugar Organization on Thursday sharply reduced its forecast for an expected global sugar surplus for the 2018/19 season, cutting production outlooks for Brazil, India, Pakistan and the European Union.
The inter-governmental body, in a quarterly report, forecast there would be a global surplus of 2.17 million tonnes in 2018/19 (October/September), down from a previous projection of a 6.75 million tonne surplus issued in August.
The ISO also cut its estimate for the size of the surplus in 2017/18 to 7.28 million tonnes from 8.60 million.
“The cumulative two-season global statistical surplus has been downgraded by a striking 5.892 mln tonnes,” the ISO said, noting global production was no longer expected to expand.
Global production in 2018/19 was seen at 180.49 million tonnes, down from a previous forecast of 185.22 million and now below the prior season’s 182.70 million.
The ISO said production forecasts had been revised down for Brazil (minus 2.2 million tonnes), India (minus 2.0 million tonnes), the EU (minus 750,000 tonnes) and Pakistan (minus 400,000 tonnes).
“Such large-scale downward adjustments cannot be offset by smaller increases for other producers,” the ISO said.
The ISO also said its preliminary thoughts indicated a modest deficit of about two million tonnes was on the horizon for 2019/20 “heralding the end of the surplus phase in the world sugar cycle.”
“The projected global surplus (for 2018/19) is not that high and a combination of unforeseen production decreases in several pivotal players would likely lead to an earlier arrival of a deficit phase,” the ISO said.
Reporting by Nigel Hunt; Editing by Kirsten Donovan; Editing by Alexandra Hudson and Kirsten Donovan