NEW YORK: The world's sugar supply balance is expected to deteriorate in the 2021/22 season that started in October due to lower output in China, one of the world's largest importers, broker StoneX said on Wednesday.

The season will see demand exceeding production for the third consecutive year, StoneX said, projecting a supply deficit of 1.9 million tonnes - larger than the 1.8 million tonnes deficit it projected in November.

"Frosts reported in Guangxi, an important sugar producing region in China, and the switch by farmers to other crops seen as more profitable cut the sugar production outlook for the country," StoneX said in a report.

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The broker said it reduced its estimate for Chinese sugar production by 300,000 tonnes to 10 million tonnes in 2021/22 (Oct-Sept), 6.3% less than the previous season.

It said the situation will lead to strong imports by China during the year, estimated at between 4.5 million and 5.5 million tonnes.

The broker kept its estimates for sugar production in India and Thailand at 31.5 million tonnes and 10.7 million tonnes, respectively, as both large producers have good crops this year.

It also kept unchanged its view for the new Brazilian center-south sugarcane crop at 565 million tonnes, with sugar production seen at 34.5 million tonnes.