Insight Focus
Poor weather could mean global sugar production falls in 2023/24. Consumption is at an all-time high, leaving the world in deficit. Will CS Brazil’s large crop solve the problem?
Global Sugar Production
The world will produce 178.3m tonnes of sugar in 2023/24. This is the second largest crop on record after the 2017/18 and the 2021/22 crop. This forecast is 0.9m tonnes lower than our June update.
A large part of this downgrade comes from Thailand and India, as they have been experiencing poor weather conditions. In Thailand, the impact of the drought was more severe than anticipated, causing some areas of newly planted cane to fail. As a result, we now think that Thailand will harvest around 66.5m tonnes of cane, down from our initial estimate of 74m tonnes. This would be the lowest harvest in 15 years.
On a more positive note, the Indian Meteorological Department has forecasted that a monsoon should pick up in July, August, and September. So, production in India should still remain on track.
Global Sugar Production
Global Sugar Consumption
In 2023/24 we think that the world will consume over 179m tonnes of sugar, this will be the highest on record and represents a 2.3m tonnes increase from the previous season. If consumption continues to rise in tandem with population growth, we should see a 2m tonne increase each season.
Due to minor adjustments in several regions, this forecast is 300k tonnes lower than our previous update.
Small Production Deficit
A drop in global production, combined with record-high consumption, means the world has 0.8m tonnes less sugar to meet demand.
This deficit has increased by 500k tonnes since our last update and can be attributed to the fact that many northern hemisphere countries, particularly those in Europe and Southeast Asia, are experiencing adverse weather conditions that are impacting their crop.
As a result, we believe the raw and refined sugar markets will remain undersupplied for the remainder of 2023 and 2024.
CS Brazil Production Update
In the upcoming 2023/24 season, we think CS Brazil will produce 38.2m tonnes of sugar, up 4.5m tonnes from the previous season, and the 2nd largest on record.
Despite heavy rains at the start of the season, which prevented mills from operating efficiently and thus slowed crushing, weather conditions improved in May and June, allowing mills to catch up.
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