Source :Rabobank
12 September, 2012
With the 2011/12 international crop year closing at the end of September, global stocks and the stocks/consumption ratio have risen, with India, China, the EU, Russia, Guatemala and Pakistan, among others , contributing to an increase in global sugar production of some 8% from 2010/11 to 2011/12.
Commodity Online
Global projected sugar surplus for 2012/ 13 has been revised upwards by Rabobank in its latest quarterly update on sugar. The Bank expects surplus for 2012-13 at 5.2 million tons up from 4.6 million tons.
The bank said:
“India´s monsoon appears to have recovered somewhat in recent weeks, and there is a growing consensus that cane production in Brazil´s Centre/South region in the local 2013/14 season (part of which falls in the 2012/13 international crop year) could see a significant increase over the 510 million tons expected this season . These factors, together with positive outlooks for Russia, China and Thailand , among other origins , have led us to increase the projection of the 2012 /1 3 surplus from 4.6 million tons to 5.2 million tons of sugar, raw value.”
Global stocks increased in 2011/12
With the 2011/12 international crop year closing at the end of September, global stocks and the stocks/consumption ratio have risen, with India, China, the EU, Russia, Guatemala and Pakistan, among others , contributing to an increase in global sugar production of some 8% from 2010/11 to 2011/12.
At the end of the 2011/12 international crop year, therefore, the global stocks/consumption situation is far more comfortable than it was at the end of the two preceding crop years.
Prices in a cyclical downturn
As the global supply/demand balance has moved from deep deficit to surplus and with the expectation of a further surplus and build - up of stocks in 2012/13, the price cycle has followed suit. With concern in recent weeks about the current Brazilian crop and about the forthcoming Indian harvest diminishing, a large part of the ‘risk premium’ associated with these crops has come out of world prices.
India sugar output
India’s sugar production for 2012/13 is currently expected to range between 24 million and 25 million tons, versus 26 million tons white value in 2010/11. Consumption in 2012/13 is forecast at between 22 million and 23 million tonn es. Monsoon rains have been 12% below normal as of end- August and, though most of the cane producing regions are irrigated, the dry weather is expected to impact the cane crop.
Cane yields are expected to be affected, as irrigation from existing water reservoirs cannot offset the deficit in rainfall. There is also an emerging trend of cane farmers sowing short duration monsoon crops and diverting cane for use as cattle fodder to take advantage of attractive prices offered by the government for this season.
Sugar production in Maharashtra, the largest sugar producing state, is projected to decline by 15% in 2012/13, to 7.6 million tons, from 8.9 million tons in 2011/12, owing to this year´s rainfall deficit. Output in Karnataka for 2012/13 is expected to decline by 21% to 3.0 million tons, as a result of dry weather and an 11% reduction in cane area.
Partially offsetting these projected output reductions, sugar production in Uttar Pradesh for 2012/13 is expected to increase by 12% to 7.8 million tons, and sugar production in Tamil Nadu is expected to total around 11% more than last season´s output of 2.3 million tons.
12 September, 2012
With the 2011/12 international crop year closing at the end of September, global stocks and the stocks/consumption ratio have risen, with India, China, the EU, Russia, Guatemala and Pakistan, among others , contributing to an increase in global sugar production of some 8% from 2010/11 to 2011/12.
Commodity Online
Global projected sugar surplus for 2012/ 13 has been revised upwards by Rabobank in its latest quarterly update on sugar. The Bank expects surplus for 2012-13 at 5.2 million tons up from 4.6 million tons.
The bank said:
“India´s monsoon appears to have recovered somewhat in recent weeks, and there is a growing consensus that cane production in Brazil´s Centre/South region in the local 2013/14 season (part of which falls in the 2012/13 international crop year) could see a significant increase over the 510 million tons expected this season . These factors, together with positive outlooks for Russia, China and Thailand , among other origins , have led us to increase the projection of the 2012 /1 3 surplus from 4.6 million tons to 5.2 million tons of sugar, raw value.”
Global stocks increased in 2011/12
With the 2011/12 international crop year closing at the end of September, global stocks and the stocks/consumption ratio have risen, with India, China, the EU, Russia, Guatemala and Pakistan, among others , contributing to an increase in global sugar production of some 8% from 2010/11 to 2011/12.
At the end of the 2011/12 international crop year, therefore, the global stocks/consumption situation is far more comfortable than it was at the end of the two preceding crop years.
Prices in a cyclical downturn
As the global supply/demand balance has moved from deep deficit to surplus and with the expectation of a further surplus and build - up of stocks in 2012/13, the price cycle has followed suit. With concern in recent weeks about the current Brazilian crop and about the forthcoming Indian harvest diminishing, a large part of the ‘risk premium’ associated with these crops has come out of world prices.
India sugar output
India’s sugar production for 2012/13 is currently expected to range between 24 million and 25 million tons, versus 26 million tons white value in 2010/11. Consumption in 2012/13 is forecast at between 22 million and 23 million tonn es. Monsoon rains have been 12% below normal as of end- August and, though most of the cane producing regions are irrigated, the dry weather is expected to impact the cane crop.
Cane yields are expected to be affected, as irrigation from existing water reservoirs cannot offset the deficit in rainfall. There is also an emerging trend of cane farmers sowing short duration monsoon crops and diverting cane for use as cattle fodder to take advantage of attractive prices offered by the government for this season.
Sugar production in Maharashtra, the largest sugar producing state, is projected to decline by 15% in 2012/13, to 7.6 million tons, from 8.9 million tons in 2011/12, owing to this year´s rainfall deficit. Output in Karnataka for 2012/13 is expected to decline by 21% to 3.0 million tons, as a result of dry weather and an 11% reduction in cane area.
Partially offsetting these projected output reductions, sugar production in Uttar Pradesh for 2012/13 is expected to increase by 12% to 7.8 million tons, and sugar production in Tamil Nadu is expected to total around 11% more than last season´s output of 2.3 million tons.
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