NEW YORK - World sugar production will outstrip demand by 12.59 million tonnes in the 2018/19 crop year that begins Oct. 1, according to an industry presentation from sugar analysts at S&P Global Platts/Kingsman during New York "Sugar Week."
That's higher than the firm's outlook of 11.05 million tonnes and would represent the largest single-year surplus since at least 2006/2007, according to prepared remarks by Claudiu Covrig, senior agriculture analyst.
It will come on the heels of a surplus in the current 2017/18 crop year of 11.46 million tonnes, revised from a previous forecast of 9.24 million tonnes.
Industry players have been raising their forecasts for another huge surplus due to the swelling supplies in India.
Covrig forecast the Indian crop to reach 35.326 million tonnes, up from 33.696 million tonnes in the current 2017/18 crop year. That would be the highest ever, according to U.S. government records dating back to 1959/1960.
The Indian figure would outstrip a forecast of production in Brazil's center-south region of 33.582 million tonnes. Thailand's output in 2018/19 will remain high 14.928 million tonnes, Covrig said.
The large excess has raw sugar prices languishing near their lowest since 2015 and margins for the world's cane refiners squeezed.
A 2015 low of 10.13 cents per lb is now "vulnerable," with market players saying single-digit figures could be on the horizon, Claudiu said in his remarks.