Platts Kingsman
cautioned over a long-awaited recovery in sugar prices as it ditched
expectations of a production deficit this season, and slashed its forecast for
a shortfall in 2015-16 below 500,000 tonnes. Unless there are major weather
events, the long-awaited bull run in sugar remains elusive, said Claudiu
Covrig, senior agricultural analyst at the Swiss-based analysis group. The
comment came as Kingsman hiked its forecast for sugar supplies over this season
and next by a combined 8.3m tonnes. This included a revision to a production
surplus of 3.39m tonnes, from a deficit of 122,000 tonnes, its forecast for
supplies in 2014-15, on an October-to-September basis. The revision was fuelled
by higher crush expectations for India, Brazil's key Centre South region and
Thailand, which combined… give market bulls little hope, Mr Covrig said. These
numbers show that getting rid of a stubborn surplus will be harder than some
anticipated, with output now looking like exceeding consumption for a fifth
successive season. Kingsman slashed its forecast for the deficit next season
from 5.247m tonnes to 466,000 tonnes - reflecting a 3.8m-tonne upgrade to 29.9m
tonnes, raw value, in sugar output in India, the second-ranked producing
country. Brazil's Centre South, for which Kingsman raised its production
forecast for 2015-16 (using the local April-to-March crush year) by 1.1m tonnes
to 33.23m tonnes.
The comments came as
Unica, the cane industry group, for the Centre South, revealed that sugar
output in the Centre South reached 1.59m tonnes last month, up 6.1% year on
year. The increase reflected an increase of 12% to 45.0m tonnes in cane
production, offset by a decline in the proportion of crop turned into sugar
rather than ethanol.
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