The global sugar market is likely to witness supply deficit due to reduced sugar output in Brazil and Thailand. This is likely to benefit India to export sugar but the prices in the domestic market are likely to remain stable due to excess carryover stock.
During the 2019-20 season, the sugar supply was less as compared with demand and it was expected that sugar prices in the world market would increase but the prices fell more than 30% between February and April 2020 due to the coronavirus pandemic that led to lockdown.
For the 2020-21 season, sugar output in Brazil, EU and Thailand would decline due to unfavorable weather. The deficit would be met by the Indian exporters where bumper sugar output is expected this season.
According to the International Sugar Organisation (ISO), global sugar output is estimated at 171.1 mt against the demand of 174.6 mt. Brazil meets one-fifth of the global sugar requirement every year. The country is likely to witness a dip in sugar output due to dry weather and increased demand for crude oil. Thailand produces 9% of global sugar output and the country is facing less sugar output due to bad weather. For the consecutive third year European Union would witness a drop in the sugar output due to increased viral disease and reduced acreage production.