ED&F Man reduces surplus estimate by 27%
Published: 08/02/2012, 10:37:23 AM
ED&F Man Sugar says the global sugar surplus for the 2012/13 will be 27% smaller than previously estimated as rains delayed the crop in Brazil and dry weather threatens to cut output in India, according to Bloomberg.
Sugar supplies will be 4.5 million metric tonnes bigger than demand, down from a previous forecast of 6.2 million tonnes, the London-based trader estimates. That follows a surplus of 9.6 million tonnes in 2011/12. The estimates are on the basis of national crop years, which begin when the harvests in each of the producing countries starts being collected, said Jack Hannon, a commodities research associate at the company.
"The crop in centre south Brazil hasn't progressed as quickly as people were hoping," he said by phone. "The scanty rains in India look like they will partially impact production for next year, but it's not a disaster there yet."
The sugar cane crop in Brazil's centre south, the main growing region of the world's biggest producer, reached 170.6 million tonnes from the start of the 2012/13 season through July 15, according to industry group UNICA. That's down 22 percent compared with the same period last year. Growing regions got 200 millimetres to 300 millimetres of rain in May and June, beating the 30-year average of 100 millimeters, according to Sao Paulo- based forecaster Somar Meteorologia.
In India, the world's second-biggest consumer and largest producer, the crop is being threatened by a lack of rainfall. The monsoon, which brings more than 70% of the country's annual rain, has been 19% below normal since June 1, according to the India Meteorological Department.
Sugar output in India may be 24 million tonnes in the 2012/13 season that starts there in October, as dry weather may result in 2.5 million to 3 million tonnes less in the Maharashtra and Karnataka states, Paul Bannister, head of sugar brokerage at Marex Spectron Group in London, said in a report on July 30.