NEW YORK: The global sugar market will see a surplus of 5.5 million tonnes in 2018/19 due to higher production in India, Thailand, China and the European Union, Societe Generale said on Wednesday.
Global sugar demand was forecast to rise 1.5 percent next year, in line with the five-year average, Societe Generale said in its Commodities Outlook report.
"Going forward, Brazil's sugar-ethanol parity floor will remain a key driver of sugar prices, especially in the context of under-hedged Brazilian sugar production in (marketing year) 18/19, and retracing energy prices will weigh on sugar prices," Societe General said.
The bank pegged raw sugar prices to fall to 14.4 cents per lb in its six-month forecast. The spot futures contract settled up 2.7 percent at 15.28 cents per lb on Wednesday.
In coffee, Societe General forecast a supply surplus of 6.3 million bags of arabica in 2018/19 and a deficit of robusta of 3.4 million bags.
Arabica coffee prices were forecast to average $1.30 per lb in six months, up slightly from Wednesday's benchmark contract settlement at $1.27.
Robusta coffee was pegged rising to $1,850 per tonne amid strong global exports and record inventory levels in major consuming countries.
Comments
Comments are closed for this article.