World sugar output will exceed consumption by 3.8 million metric tons in the year that begins Oct. 1, Martin Cardozo, a trading manager for Bunge Latin America LLC, said at an industry event Sept. 12. That’s almost triple the forecast by the International Sugar Organization.
The Oct. 18 fire at the Santos Port terminal in Brazil turned out to be a one-day event. A combination of other ports picking up some of the slack and a well-supplied world market has allowed sugar prices to fall back to the lows.
The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.
Sugar prices continue to trend lower and are now trading at a three-year low. According to the ISO, there will be a global production/consumption surplus of 8.5 million tonnes for the 2012-13 marketing year. The ISO forecasts another surplus for the new crop year.
Recent developments in India are very bullish and are being completely ignored by the sugar market. Severe drought will affect the 2013-14 crop to the extent that the key growing regions will see acreage fall by 20% to 25%.