The global sugar market is expected to fall into a supply deficit of 1.58 million mt during crop year 2018-19, after a surplus of 7.54 million mt was registered for crop year 2017-18, according to a statement made Tuesday by Datagro Consultoria president Plinio Nastari.
In addition to the projection for the current crop year, Nastari released initial projections for the sugar balance for the 2019-20 crop year, indicating a larger deficit of 7.51 million mt.
Nastari blamed unfavorable climate for reducing crop yields in major global producers, such as India.
"Since June, rainfall has been 7.5% below historical averages, with production projections of 32.5 million mt in the 2018-19 [Indian] crop, compared to an initial forecast of 35.05 million mt," Nastari said.
Nastari said that projections for Indian crop growth in crop year 2019-20 were 29 million mt, with the reduced yields due to drought. Other major producers to be affected include Pakistan and the EU, according to the report.
Nastari projected that Brazilian sugar production will be 26.4 million mt of sugar during crop year 2018-19, with ethanol continuing to dominate Brazilian sugarcane use.
The Indian and North-Northeast Brazilian crop years run from October-September, and the Central-South Brazilian crop year runs from April-March.
