Kingsman sees 2010/11 surplus at 3.52 million tonnes
Published: 09/01/2010, 12:51:29 PM
Switzerland-based sugar brokerage Kingsman S.A. Wednesday cut its estimate for the 2010/11 global sugar surplus to 3.52 million metric tonnes from its June projection of 5.2 million tonnes, according to Dow Jones.
The estimate is for the crop year to March 2011.
Last year, the global sugar market had a deficit of 6.91 million tonnes.
Kingsman, in its latest estimate, has projected global production at 167.7 million tonnes, down from earlier estimates of 170.2 million tonnes.
The production will still be higher than 2009/10, which was at 153.56 million tonnes, the brokerage said.
"The global surplus we had expected earlier is reducing. This is due to poor weather in Brazil, Russia, Pakistan, South Africa and elsewhere," Jonathan Kingsman, head of the brokerage said.
The brokerage estimated global consumption this crop year is likely to rise 2.3% to 164.2 million tonnes, helped by prices falling earlier in 2010/11.
Global raw sugar prices fell nearly 60% in May from a record of 30.40 cents a pound in February.
"India and Brazil continue to dominate headlines. While Brazil's sugarcane crop has been very dry recently, India's fortunes have improved, with good rainfall in many cane growing areas," said Jonathan Kingsman.
Brazil has been facing dry weather since April, causing its sugarcane output estimate to fall 4.3% below the initial expectation of 595.9 million tonnes.
Earlier in the day, Kingsman told Dow Jones Newswires that India is likely to export 1.5 million to 2.0 million tonnes of sugar in the next marketing year to cash in on rising prices, caused by the erratic weather.
The brokerage has estimated India's 2010/11 sugar output at 24.85 million tonnes-- marginally lower than the local industry estimate of 25.5 million tonnes.