With Brazil keeping its focus firmly on cane ethanol manufacturing, the market has been keeping an eye on India, which despite weather concerns is still the heir apparent as the top sugar producer in 2018/19. News of pest damage and prior dry conditions cutting into cane yields, for example, contributed significantly to the bullish activity that world sugar futures saw in recent weeks.
Reports from key growing regions suggest that the last month’s output forecast from ISMA may have been slightly optimistic. At the end of October, ISMA published a revised production forecast as high as 32.0 MMT of sugar, already below previous forecasts and down just a point and a half from 2017/18 output. ISMA further suggested that cane diversion to ethanol could shave that figure by some 0.5 MMT. One industry representative is citing a figure closer to 30.0 MMT, reported Reuters, down more than 7 percent from 2017/18 production.
As of Nov. 15, cumulative production for 2018/19 was reported at 1.16 MMT of sugar, down more than 15 percent YOY. ISMA reported that 238 mills are already crushing, down from 349 mills already by mid-November 2017. It should be noted that last season saw an exceptionally early start for the crush campaigns of mills in several states, pressured by a government then concerned by lower stocks and food price inflation.
India wholesale sugar pricing, monthly history, rupees & dollars
Source: NIC, McKeany-Flavell
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