LONDON - The world sugar market is poised for two consecutive years of surplus production, following a surge in output from Thailand and India, Rabobank said on Tuesday.
The global market is likely to see a sugar surplus of 10.5 million tonnes, raw value, in the 2017/18 season due to "enormous" harvests in the two countries.
This was up 3 million tonnes from the group's previous quarterly forecast, with Rabobank signalling it was almost entirely due to revisions to its Indian and Thai production expectations.
"These crops haven't been merely big, they have both been enormous," the group wrote in its Q2 sugar update.
The glut is expected to be followed by another surplus of 5 million tonnes in 2018/19, despite a projected overall decline in global production.
Indian output in the 2018/19 season is seen at 35.5 million tonnes, up from 34 million tonnes in 2017/18.
Thai sugar output is expected to decline slightly to 14.5 million tonnes, from a record 15.7 million tonnes produced in the 2017/18 cycle, Rabobank said.
EU sugar production is seen at 20 million tonnes in 2018/19, down from 20.9 million tonnes in 2017/18, the first post-quota season for European farmers.