London: The world sugar market is set for a larger surplus than previously expected in the 2017/18 season, followed by another year of oversupply, according to a Reuters survey of 12 traders and analysts.
Sugar prices are seen remaining roughly unchanged in the first quarter of 2018 and recovering slightly by the end of 2018, though still posting a yearly decline.
Spot raw sugar prices are expected to finish the quarter at 13.35 cents per lb and to end the year at 14.5 cents, up 8.5 percent from Thursday’s close but still down 4.4 percent on the year, according to the median estimate of 12 survey responses. White sugar futures are seen ending the quarter at $355 a tonne and ending 2018 at $367.50, up 3.3 percent from Thursday’s close but down nearly 7 percent year on year. Benchmark prices have already lost about a third of their value in the past year on an expected surge in production.
The world sugar balance sheet is poised for a surplus of 8.2 million tonnes in the current 2017/18 season, according to the respondents. This is nearly twice the 4.3 million tonne surplus forecast for 2017/18 in a Reuters poll issued last July. A second consecutive season of excess production is expected in 2018/19, with the surplus forecast at 5 million tonnes.
Potential for Indian exports to the global market are expected to be a key factor in the market, respondents said.—Reuters