World sugar production in 2005/06 will be an estimated 144.2 million tonnes, up 3.3 million tonnes from a revised 2004/05 estimate, the US Agriculture Department said on Wednesday.
In its latest biannual world sugar estimates, the USDA projected 2005/06 world demand at 142.8 million tonnes, up 1.7 million tonnes from a year earlier. Ending stocks were forecast at 31.5 million tonnes, down 3.6 million tonnes.
USDA said revisions of its 2004/05 May estimates placed world production at 140.8 million tonnes, down 1.3 million tonnes; world consumption at 141.1 million tonnes, down 400,000 tonnes and ending stocks at 35.1 million tonnes, down 600,000 tonnes.
The marketing year for sugar begins on October 1.
Analyst F.O. Licht recently estimated the world sugar market would tighten in 2005/06 because stocks as a percentage of consumption will fall to 40.82 percent, down from 42.34 percent in 2004/05.
Licht also noted that the retreat of the EU as a major exporter, Brazil's growing dominance of the world market, and the growing use of ethanol would contribute to big changes in the world sugar market. The International Sugar Organisation (ISO) recently forecast the global sugar deficit in 2005/06 would narrow to 1.01 million tonnes from a deficit of 3.17 million tonnes in 2004/05.
It also forecast global sugar output of 149.7 million tonnes in 2005/06, up from 144.4 million in 2004/05, and world sugar consumption of 150.7 million tonnes in 2005/06, up from 147.6 million in 2004/05.
EU farm ministers are this week trying to reach a deal to overhaul Europe's subsidy-laden sugar policy, as ordered by a World Trade Organisation ruling. The EU sugar policy has been criticised for harming developing nations that produce sugar because it encourages millions of tonnes of EU sugar to flow into world markets and lower prices.