A global sugar supply deficit of 2.1 million tonnes is seen developing in the 2019/20 season, according to a presentation from S&P Global Platts made on Tuesday.
The deficit will be the result of declining global production, especially in Asia, S&P Global Platts said.
In India, output is set to fall to 28.4 million tonnes from 32.86 million in 2018/19, S&P Global Platts said.
Production in Thailand, meanwhile, is seen falling to 12.9 million tonnes from 14.6 million in 2018/19.
While lower output will help underpin prices, potential gains in futures prices over the next six months will be capped by the ethanol parity level, which is pegged at 13-14 cents.
Price gains are also expected to be limited by stagnating consumption, especially as demand in wealthier countries wanes due to consumers growing more health conscious.
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