Kingsman Sees Sugar Surplus Dropping 51% as Output Slides

The global sugar surplus will be 51 percent smaller in the 2013-14 season compared with a year earlier as lower prices result in a drop in production, according to researcher Kingsman SA, owned by McGraw-Hill Cos. (MHP)

Sugar supplies will be 5.6 million metric tons higher than demand in the 12 months starting Oct. 1, the researcher, based in Lausanne, Switzerland, said in a report e-mailed today. That compares with 11.5 million tons in 2012-13. Production will slide 1.8 percent to 178.5 million tons in the period from a year earlier, according to the report.

While production in Brazil’s center south, the main growing region of the world’s biggest producer, will climb to a record in the 2013-14 season that starts there in April, output is set to fall in other countries including India, the second-biggest grower and largest consumer, Kingsman said. Russia, Ukraine, the U.S. and Mexico will also see declines, it said.

“Given low world and domestic prices, we expect production to decline in a number of other countries as farmers search for better returns elsewhere,” Kingsman said, adding that output is forecast to decline in “some of the more expensive producers.”

On a national crop year basis, which starts when harvesting begins in each of the countries, the surplus will be 39 percent smaller in 2013-14 at 6.28 million tons, the researcher estimated. The excess supplies represent 3.64 percent of consumption, down from 6.07 percent in 2012-13, it said. Sugar fell 39 percent in the last two years and is down another 3.5 percent in 2013. A third year of price declines would be the longest slump since 1992, data on Bloomberg showed.

Kingsman Sees Sugar Surplus Dropping 51% as Output Slides

The global sugar surplus will be 51 percent smaller in the 2013-14 season compared with a year earlier as lower prices result in a drop in production, according to researcher Kingsman SA, owned by McGraw-Hill Cos. (MHP)

Sugar supplies will be 5.6 million metric tons higher than demand in the 12 months starting Oct. 1, the researcher, based in Lausanne, Switzerland, said in a report e-mailed today. That compares with 11.5 million tons in 2012-13. Production will slide 1.8 percent to 178.5 million tons in the period from a year earlier, according to the report.

While production in Brazil’s center south, the main growing region of the world’s biggest producer, will climb to a record in the 2013-14 season that starts there in April, output is set to fall in other countries including India, the second-biggest grower and largest consumer, Kingsman said. Russia, Ukraine, the U.S. and Mexico will also see declines, it said.

“Given low world and domestic prices, we expect production to decline in a number of other countries as farmers search for better returns elsewhere,” Kingsman said, adding that output is forecast to decline in “some of the more expensive producers.”

On a national crop year basis, which starts when harvesting begins in each of the countries, the surplus will be 39 percent smaller in 2013-14 at 6.28 million tons, the researcher estimated. The excess supplies represent 3.64 percent of consumption, down from 6.07 percent in 2012-13, it said. Sugar fell 39 percent in the last two years and is down another 3.5 percent in 2013. A third year of price declines would be the longest slump since 1992, data on Bloomberg showed.


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