iGrain India - The International Sugar Organization (ISO) has highlighted a significant global sugar supply issue for the 2024-25 marketing season.
It has estimated that global sugar production will fall short by about 25 lakh tonnes compared to consumption. Specifically, the estimated sugar production will be 1790.69 lakh tonnes, which is 25.13 lakh tonnes less than the projected global use of 1815.82 lakh tonnes. This production shortfall will likely reduce the global outstanding stock of sugar.
To meet the supply gap, countries will have to rely on their existing sugar stocks, which will naturally deplete those reserves.
The ISO predicts that the global sugar export availability will decline to 631.27 lakh tonnes, which is about 13 lakh tonnes below the estimated import demand of 644.09 lakh tonnes. As a result, countries will need to tap into these additional stocks to fulfill import requirements.
In terms of global trade, the 2023-24 marketing season saw a record high in sugar trade, exceeding 690 lakh tonnes.
However, in the upcoming season, with reduced production in major sugar-producing countries like Brazil, India, and Thailand, the global sugar market will face a challenging supply environment.
Brazil and Thailand, the top two global exporters, will produce less sugar compared to last year, while India, the second-largest producer overall, will also see a decline in production. Other key sugar producers include the European Union, Australia, China, and Mexico.
Given the supply-demand imbalance, the global sugar market is expected to experience higher prices in the 2024-25 season.
The situation is further complicated by a reduced supply from the major exporting countries, indicating a likely continued boom in sugar prices.