Sugar supply balance heading to surplus despite fall in Brazil, says Datagro

NEW YORK: The global sugar supply balance is projected to swing from a deficit of 1.51 million tonnes in the 2020/21 season (Oct-Sept) to a surplus of 2.74 million tonnes in 2021/22, sugar and ethanol consultancy Datagro said on Wednesday.

Datagro's chief analyst Plinio Nastari said a production recovery in Thailand, another good crop in India and higher yields in Europe, despite frosts in France, were the main factors behind the swing from a deficit to a surplus.

The market will still have a surplus even though production in Brazil is expected to drop to 36.3 million tonnes from 38.5 million tonnes in 2020/21 as the country faces lack of rains.

Nastari said during a presentation on Wednesday that he expected India to produce about 30 million tonnes in 2021/22 following the previous season's excellent crop which is seen at 31.2 million tonnes.

Thailand's sugar cane crop is seen rising to 85 million tonnes from 66 million, which is expected to boost the country's sugar exports to 5.8 million tonnes from 3.9 million tonnes.

Datagro expects Russia's sugar production to rise 18.5% to 6.1 million tonnes in 2021/22.

But the consultancy expects a volatile market despite the balanced supply and demand outlook, due to developments in Brazil where the sugar season got off to a very slow start.

"We have to wait for coming weeks to have more clarity on how cane crushing will progress in the center-south," said Bruno Wanderley, another Datagro analyst taking part in the presentation.