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Supply Chain

Brazil's Sugar Output View Revised Down Amid Global Supply Growth

Brazil's centre-south (CS) new sugar crop was revised downward as consultancy Datagro sees mills diverting more cane to ethanol production, but higher production in Asia will still drive an increase in the global supply of the sweetener.

Datagro chief analyst Plinio Nastari said during the Citi ISO Datagro sugar conference in New York that Brazil's CS sugar production should fall to 32.1 million tonnes, 900,000 tonnes less than its previous estimate in March.

The analyst adjusted its projection of the amount of cane Brazilian mills are expected to allocate to sugar production to 43.8% from 44.7% in March. Each percentage point in that production mix means around 750,000 tonnes less sugar to be produced.

Sugar Production

Nastari said that the reduction in the sugar production view is also a result of a smaller cane crush, now seen at 552 million tonnes from 562 million tonnes projected in March.

"Some cane fields are still showing irregular development. Soil moisture is bellow historical levels," he said in a presentation.

Datagro increased its view for Brazil's CS ethanol output by 100 million litres to 29.9 billion litres.

Read More: Brazil's Sugarcane Area Fell 3.5% Last Season As Soy, Corn Grow

Global Supply

The smaller Brazilian sugar production will not prevent an increase in the global supply, as production in India and Thailand, the other major global exporters, is expected to increase.

Datagro expects Thailand's sugar production to jump to 13 million tonnes in 2022/23 from 10.1 million tonnes in 2021/22, while India is seen producing again more than 35 million tonnes.

As a result, the consultancy sees the surplus in the global sugar market increasing to 2.86 million tonnes in 2022/23 from 1.42 million tonnes in 2021/22.

Others see an even larger surplus next season. Consultancy StoneX expects it to reach 4.1 million tonnes.

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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