The International Sugar Organisation (ISO) has projected a rise in global sugar production for the 2022-23 season, estimating it at 179.89 million tonnes (mt), a 0.87% increase from the previous season's 178.33 mt.
Despite the higher production, the ISO anticipates a decrease in import demand and export availability. Consumption for the 2022-23 season is expected to reach 180.22 mt, a 1.24% increase from the previous season's 178.02 mt, resulting in a projected deficit of 0.34 mt compared to a surplus of 0.31 mt in 2021-22.
While end stocks are forecasted to be 0.4% lower at 100.67 mt compared to 100.71 mt the previous year, the sugar trade industry views this as an improvement. Import demand is projected to be lower at 65.01 mt, down from 66.07 mt, and export demand is pegged at 64.76 mt, a decrease from 65.7 mt in 2021-22.
The CEO of AgriMandi, Uppal Shah, commented on the ISO's report, stating that the improved global sugar stock situation will likely have a calming effect on international sugar prices. Sugar prices recently reached a 12-year high on November 9, exceeding 28 US cents per pound, but have since eased to 27.20 cents following the ISO's estimate.
Shah pointed out that Brazil's increased sugar production will contribute to meeting global demand since India is not actively participating in the international market.
Also, he mentioned that the Indian government will likely maintain export restrictions to fulfill domestic consumption demands and ethanol commitments.
Looking ahead, Shah highlighted the significance of crude oil prices in determining Brazil's production ratio between sugar and ethanol.
In the short term, he predicts a softening of international sugar prices, considering the potential improvement in Brazil's sugar production and the role of crude oil prices in shaping the market dynamics.
