Sugar Deficit to Narrow on Indian Output, Green Pool Says
A customer looks at sugar grains at a store in the Old Delhi area of New Delhi, India. (Photographer: Prashanth Vishwanathan/Bloomberg)  

Sugar Deficit to Narrow on Indian Output, Green Pool Says

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(Bloomberg) -- The sugar market deficit will narrow next season as Indian production rebounds, according to Green Pool Commodity Specialists.

The deficit will narrow to 1.01 million tons in 2020-21, Green Pool said in its first estimate for next season. The researcher increased the size of its projected deficit for 2019-20 to 6.63 million tons.

Green Pool said its outlook for a much smaller deficit next season may disappoint some market bulls, who helped push raw sugar prices to a two-year high on Monday. Plantings in the Indian states of Maharashtra and Karnataka could generate a record crop, after output was hurt by drought and flooding.

Sugar Deficit to Narrow on Indian Output, Green Pool Says

India will bounce “back strongly from this harvest’s problems,” said Tom McNeill, director at Brisbane, Australia-based Green Pool. “Unless there is a monsoon failure or some crop disease issue, it seems that farmers have voted with their feet for the best returning crop in India – sugarcane.”

Green Pool said higher prices could boost 2020-21 output from Brazil’s Center-South region above its currently projected 27.5 million tons. That could flip the global market into a surplus, the researcher said.

Green Pool 2020-21 Sugar Output Forecasts

  • India: 32 million tons
  • Center-South Brazil: 27.5 million tons
  • Thailand: 12.8 million tons
  • European Union: 15.79 million tons

©2020 Bloomberg L.P.

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