Sugar Market Seen by ISO Heading for 4th Consecutive Surplus

August 23rd, 2013

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Category: Sugar

(Bloomberg) – Global sugar supplies will exceed demand for a fourth consecutive year in the season that starts Oct. 1, possibly sending prices even lower, the International Sugar Organization said.

Sugar production will exceed demand by 4.5 million metric tons in 2013-14, the London-based organization said in a report e-mailed today. It forecast a surplus of 3.5 million tons last month. Raw sugar prices have dropped 16 percent this year with the surplus for 2012-13 at a record 10.3 million tons, ISO said.

“It seems that a lower global surplus per se cannot be treated as a price supportive factor and the market may record more losses during the 2013/14 season,” ISO said. “Fundamentals are likely to remain in surplus for at least one more year.”

Raw sugar for October delivery dropped 0.1 percent to 16.3 cents a pound by 10:42 a.m. in New York on ICE Futures U.S.

Global production will fall 1.2 percent to 180.8 million tons, the first drop since 2008-09, while demand expands 2.1 percent to 176.3 million tons, ISO said. The amount of sugar available for exports will rise to a record 57.5 million tons while import demand will fall for a third consecutive year.

Global stockpiles will rise 0.5 percent to 74.4 million tons at the end of 2013-14 and reserves as a percentage of consumption will fall to 42.2 percent from 42.9 percent, according to ISO.

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