Global sugar consumption to again outpace production, draw inventories lower in 2016/17 – USDA


Global sugar consumption for 2016/17 is forecast at a record 174 million metric tons (raw value), exceeding production and drawing stocks down to the lowest level since 2010/11, United States Department of Agriculture (USDA) said in its latest report.

It said production is up 4 million tons to 169 million, as gains in Brazil and the European Union more than offset a decline in India. With growing demand, imports are forecast up 1.2 million tons.

The rising pace of global consumption has been sustained by drawing down stock levels in recent years. Consequently, stocks are approaching what appear to be historically low levels, the report said.

In fact, world raw sugar prices, after falling for over a year and bottoming at less than 11 cents per pound in August 2015, are trending higher to near 17 cents in May 2016. As prices react to high demand and as the Brazilian real struggles to find equilibrium against the dollar, market returns are needed to provide incentives for producers to catch up with demand, the report said.

Sugar overview – 2016/17

  • United States production is forecast down 200,000 tons from last year to 7.9 million on projected lower cane yields. Imports are expected to rebound 8 percent to 3.2 million tons with consumption growing slightly. Stocks are projected to dip 5 percent to 1.5 million tons.
  • Brazil’s production is forecast to rise 2.4 million tons to 37.1 million on favorable weather and a lower percentage of sugarcane being converted to ethanol (forecast at 57 percent compared to 59 percent the year before). Brazil remains the largest producer and exporter of sugar with exports projected up 1.8 million tons to 26.1 million on steady higher demand and greater exportable supplies. Consumption is down slightly on lower consumer purchases of processed foods.
  • India’s consumption is forecast to rise marginally to a record 27.2 million tons. Production is forecast to drop 2.2 million tons to 25.5 million due to lower area and yield. Drought conditions encouraged farmers to keep existing cane in production longer rather than planting new cane. With higher consumption and lower production, stocks are expected to be down 18 percent.
  • Thailand’s production is forecast to increase 360,000 tons to 10.1 million as an uptick in area offsets lower yields affected by drought. Higher demand is driving exports up 2 percent to a record 9.0 million tons while stocks are drawn down. Consumption continues to trend higher on growing household and industrial uses.
  • Production in the European Union is forecast to rebound 2.5 million tons to 16.5 million on higher sugar beet area and yield. Consumption and imports are projected flat at 18.8 million and 3.5 million tons, respectively. Exports are unchanged at 1.5 million tons, limited by the World Trade Organization sugar export ceiling.
  • Mexico’s production is forecast slightly lower at 6.5 million tons while exports are forecast to increase over one-third to 1.6 million tons due to the projected Countervailing Duty Suspension Agreement Export Limit increase. With lower production and higher exports, stocks are expected down just slightly as consumption is little changed.
  • Australia’s sugar production and consumption is projected to be flat at 5.0 million and 1.2 million tons, respectively. Exports are forecast higher at 3.9 million tons as trade agreements have increased access to markets such as South Korea.
  • China’s consumption, projected at a record 17.8 million tons, continues to trend higher bringing stocks down to 3.2 million. Production is forecast to decline to 8.2 million tons on lower area. Over the last couple of years, higher land and labor costs and the cancelation of minimum purchase prices in Yunnan, Guangdong, and Hainan provinces have resulted in growers switching to other crops such as tobacco and bananas. Imports are forecast at a record 7.9 million.
  • Russia’s production is expected to climb 120,000 tons to 5.3 million on both higher area and yield. Consumption is expected to continue to rise due to expansion in homemade jams and preserves, as well as production of home-made alcohol. Imports are boosted 50,000 tons to 750,000 tons.
  • Pakistan’s production is forecast up 280,000 tons to 5.4 million reflecting growth in area. Consumption and stocks both are expected to increase with higher demand and increased production.
  • Guatemala’s production is forecast to reach a record 3.1 million tons on improved yields and a steady expansion in area. Guatemala continues to export over 70 percent of production with exports up 2 percent to 2.3 million tons. Stocks are expected to decline as consumption continues to climb.
  • Production in Indonesia is forecast at 2.2 million tons, 175,000 tons higher due to additional area. Imports and consumption are expected to rise in line with higher demand from the food and beverage industry.

Selected 2015/16 Revisions from November 2015


World production revised 7.2 million tons lower to 164.9 million.

  • China falls 2.2 million tons to 8.4 million on lower area.
  • EU is down 2.1 million tons to 14.0 million on large 2014/15 carryover of unsold out-of-quota sugar.

World imports are revised 2.1 million tons higher to 54.4 million.

  • China climbs 1.2 million tons to 6.7 million on higher demand and a drop in production.

World exports are adjusted slightly higher to 54.9 million tons.

  • Brazil expands 600,000 tons to 24.4 million on higher world demand.
  • Mexico drops 220,000 tons on lower exports to the United States.
  • South Africa is down 170,000 tons on lower production.

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