Further world sugar surplus seen in 2003-04

A further world sugar surplus is expected in 2003/04 with little likelihood of any price recovery, British commodity house ED&F Man said on Thursday.
"We continue to expect another surplus of 2.19 million tonnes, added to the 11.8 million tonne surplus in 2002/03," Man said in its latest report.
"At this stage, little evidence exists to suggest that 2004 carries with it promises of stronger demand and higher prices, more likely a certain level of producer consolidation and stock adjustments."
Man said massive production had led to the 11.8 million tonne surplus in 2002/03.
"The start of 2004 carries with it the remnants of over-zealous production in 2003, namely from C/S Brazil and India, which resulted in an 11.8 million tonne production surplus," Man said.
"However, this year the prevailing campaigns in the EU and India are expected to be lower. In contrast, Brazil, Thailand and Australia are likely to have good years, while major buyers, Russia and Iran are expecting higher domestic production, therefore lowering the need for imports."
Man revised its forecast for world sugar production in the 2003/04-crop year down to 146.774 million tonnes, raw value, from 147.85 million seen last November.
Man increased its global consumption figure to 143.175 million tonnes (October/September), from 142.67 million tonnes forecast last year.
"The short-term outlook remains weak, as Russia, in particular, is yet to emerge as a strong buyer, leaving Thais, Central Americans and Brazils to compete for Middle East demand," Man said.
"However, high freight rates are continuing to regionalise trade, while the hope of Chinese imports is keeping Far East values buoyant."