The global sugar surplus is set to fall to 1.6 million tonnes in 2008/09 from a surplus of 11 million in 2007/08, largely due to lower production seen in the European Union and India, Czarnikow said on Wednesday. The London-based merchant did not provide a breakdown of production and consumption for 2008/09.
Czarnikow estimated 2007/08 global cane and beet sugar production at 173.3 million tonnes, up from 168.2 million in 2006/07. World sugar consumption is seen at 161.3 million tonnes in 2008, up from 155.6 million in 2007. The large production estimate for 2007/08 was largely due to upward revisions in Thailand, China, north Brazil and Cuba, according to Czarnikow.
The rising trend in sugar consumption is being driven by the developing countries combined with some substitution away from corn-based sweeteners in response to high corn prices in Asia. "The rise in production during the 2006/07 and 2007/08 seasons has resulted in the large surplus of physical sugar that is dominating the near term outlook for sugar prices," Czarnikow said.
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