NEW YORK- The world’s sugar supply balance is expected to deteriorate in the 2021/22 season that started in October due to higher use of sugarcane to ethanol production in India and lower production in Brazil, broker StoneX said on Tuesday.
The season will see demand surpassing production for the third consecutive year, StoneX said, projecting a supply deficit of 1.8 million tons, 1 million tons more than it estimated in October.
Global production was seen at 186.6 million tons, while demand was projected at 188.4 million. The broker said demand improved recently as ocean freight prices declined. It saw higher buying from Asian countries and from refining hubs.
India is seen producing a record amount of sugarcane after positive weather, but the country’s ethanol blending program will take the equivalent of 3 million tons of sugar out of the market, StoneX said, resulting in a sugar production that will be basically the same as in the previous crop, or around 31 million tons. — Reuters
