World Situation Update

World Sugar Situation

World centrifugal sugar production in 1999/2000 is forecast at a record 133.9 million metric tons, an increase of 3 percent above the previous year’s output. This forecast is the sixth consecutive year of increased world sugar production. Projected increases in 1999/2000 in Brazil, the European Union, India, and Australia were only partially offset by expected lower output in Turkey, Poland, South Africa, and Ukraine. World sugar consumption in 1999/2000 is forecast at 130.5 million tons, a 4 percent increase from the previous year’s level. Consumption increases are expected in almost every region, with the largest gains in Asia and Africa. World trade is forecast to increase 3 percent to about 36.7 millions tons. Increased exports from the EU, Brazil, and Australia will be offset by declines in Poland, South Africa, and Cuba. The export situation remains difficult, due to the high carry over stocks and low world prices.


Summary

Production

The 1999/2000 world centrifugal sugar production has been revised upward to a record 133.9 million tons (raw value), up 2 percent from the May 1999 forecast (Circular Series FS 1-99) and 3 percent above last year. Sugar produced from sugarcane is forecast a record 97.2 million tons, 4 percent above last season, and sugar processed from sugarbeets is forecast at 36.6 million tons, slightly down from last year. The largest upward production change since the May projection was made for Thailand, up 770,000 tons, while the largest downward revision was for Pakistan, down 640,000 tons.

Trade

In 1999/2000, world sugar trade is forecast at 36.7 million tons, approximately 3 percent above the previous year’s shipments. Brazil and the European Union are expected to account for much of the increase, both are forecast to increase exports by almost 1.0 million tons. Smaller gains
are forecast in Australia and Thailand. South Africa, Cuba, Guatemala and Poland are all forecast to reduce exports in 1999/2000. The leading exporters will continue to be faced with an oversupply situation in 1999/2000, which has led raw sugar prices to very low levels. The current market conditions are forcing net exporting countries to make difficult decisions, such as holding high stocks, controlling production more aggressively, or continuing to export at minimal margins.

Leading importers of sugar in 1999/2000 are Russia, Indonesia, the United States, Japan, South Korea and the European Union. Russia is expected to remain the world’s largest sugar importer, however at much lower levels than in 1998/99. Despite the relatively low price of sugar, many of the main importers of sugar are facing financial or political problems, which is limiting their uptake and causing increased uncertainty in the markets.

Consumption

World sugar consumption in 1999/2000 is forecast at a record 130.1 million tons, almost 4 percent above the previous year’s level. This increase is expected to be driven by Asia, Africa, and the Middle East. Growth in consumption is expected to continue to rise in the near future as many countries with recent economic or political trouble resume growth. Consumption has returned to a growth trend similar to 1994/95 and 1995/96, which was interrupted as financial crisis hit many developing countries. Consumption stagnated in 1998/99 and grew only 1.7 percent in 1997/98.

Stocks

Global sugar stocks are forecast to grow by 10 percent to a record 34.4 million metric tons. This would mark the second straight year of double digit growth in stocks. Stocks are have grown rapidly in several South American and Asian producing countries, namely Brazil, India, and Thailand and also in the world’s largest importer, Russia. The production and high stock situation has prolonged the world oversupply situation and thus, the low world sugar prices.

Last modified: Thursday, April 06, 2000