According to the International Sugar Organization, the forecast global balance for 2021/22 has swung to a small surplus of 0.237 mln tonnes from a deficit of 1.928 million tonnes in February. Production increased to 174.026 mln tonnes (+3.514 mln tonnes since February), and consumption to 173.789 million tonnes (+1.349 mln tonnes).
The trade balance has increased to a surplus of 1.286 million tonnes, from 0.204 mln tonnes in February, following increased exports from India in recent months. Export availability from Brazil, especially for raw sugar, is expected to see the market well-supplied in the remainder of 2021/22. The fundamental view remains neutral-to-bearish.
Recent months have seen higher prices due to the uncertainty around the Ukraine war. This has been superseded by the war’s secondary impact on inflation. This inflation-driven push towards higher commodity prices also has a strong underpinning in labour markets and supply chain costs, which could see it sustained for an extended period. From a fundamental perspective, however, the current sugar market situation has shifted further towards bearish, with the production/consumption balance now showing a small surplus and increasing export volumes from CS Brazil in coming months
ISO’s outlook for the 2022/23 season, in brief(22)02, indicates a production total of 177.372 mln tonnes, while consumption is projected to reach 174.604 mln tonnes. This indicates a surplus of 2.768 mln tonnes of sugar in the year from October 2022. Global ethanol production in 2022 has been projected to reach 110.3 billion liters (+5.1 billion from 2021), consumption has been projected to reach 106.3 billion liters (+4.5 bln from 2021). Increased production and consumption is expected in the US, Brazil and India in 2022. Molasses prices rose in recent months but remain disconnected from sugar prices in 2022.
