Sugar deficit: global production does not meet demand, negative changes in supply are forecasted.

According to StoneX broker's forecasts, negative changes are possible in the global sugar supply balance this season. The main reasons will be the increase in the use of sugarcane for ethanol production in India and the decrease in production in Brazil. StoneX data shows that sugar demand will exceed production for the third year in a row this season. A deficit of 1.8 million tons is expected, which is 1 million tons more than previously anticipated in October.

The total volume of global sugar production stood at 186.6 million tons, while demand was forecasted at 188.4 million tons. However, StoneX notes that demand has recently improved due to lower prices for maritime transport, leading to increased purchases in Asian countries and processing plants.

StoneX also points out that India is producing a record amount of sugarcane due to favorable weather conditions. However, due to the ethanol blending program with gasoline, 3 million tons of sugar will be removed from the market in the country. As a result, sugar production in India will remain at around the same level as last season, about 31 million tons.

Sugar production in the south-central region of Brazil is expected to reach 31.3 million tons, which is 12% lower than the previous year.

The new sugarcane season in Brazil, starting in April, is forecasted to increase sugarcane production by 6% to 565.3 million tons.

It is noted that sugar production in the European Union countries and the United Kingdom is forecasted at 17.2 million tons in 2021/22 (October-September), which is nearly 12% higher than last year. This is due to a wetter summer in Europe, which has increased sugar beet yields.