USDA cuts global sugar production estimation

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United States Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) has lowered the estimate sugar production for the year 2019-20 to 174 million tonne sugar, down by 6 million tonnes. The decline is forecasted due to the reduction of sugar production in India in sugar season 2019-2020.

The falling prices of sugar in the international market has helped Brazil to emphasise more on ethanol production. The excess production of sugar kept the prices low, and the mills turned back to their favourite ethanol production as the gasoline prices have increased. It is expected that the mills will allocate more sugarcane towards ethanol output because of its huge demand. Sugar output in Brazil will decline from expected production as mills are likely to divert less cane for sugar.

Sugar production in India is likely to be lowered due to a decline in cane production and reduction in cane cultivation area. According to the Indian Sugar Mills Association (ISMA), in new sugar season 2019-20 as on 15th November 2019, was 4.85 lakh tons, as compared to 13.38 lakh tons produced as on 15th November, 2018 in 2018-19 SS. New-season witnessed the downfall of 64 per cent in sugar production.

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