India, the world’s second-largest sugar producer, has “considerable scope” for more exports of the sweetener this season, according to Rabobank International.
The Asian country had exported about 1.6 million metric tons of sugar as of early May, Andy Duff, an analyst at the bank, said today in an e-mailed report. India can export as much as 4 million tons of sugar this season, the bank said.
Production in the South Asian nation will be about 26 million tons in 2011-12 while consumption will be 22 million to 23 million tons, Rabobank estimated. The country’s stockpiles may rise above 8 million tons by September, the highest since 2008, it said.
“At this stage, India looks set to produce another sugar surplus in 2012-13,” Duff said. “Seasonal cane area is projected to increase by 5 percent year-on-year.”
China may produce 11.5 million tons of sugar in 2011-12, while consumption will be 14 million to 14.5 million tons, the bank estimates. Stockpiles will rise by more than 50 percent by September because of a government program to store the sweetener, it said.
“The stocking program has lagged behind initial expectations, with less than 400,000 tons of the announced 1 million tons of sugar stock being purchased by the government at auctions,” Duff said, adding that inventory building is likely to gain momentum “over the next few months.”
The threat of El Nino weather conditions later this year has created concerns that the harvest in top producer Brazil will be further disrupted and that cane quality will drop, Rabobank said. Sugar is now only “marginally” more profitable than ethanol in the South American country, Duff said. Millers in Brazil make both the sweetener and the biofuel from cane.
The European Union may have another “above-average crop” in the 2012-13 season because of higher prices in the bloc, according to the bank. Farmers in Germany received 35 percent more than the EU minimum sugar beet price and a similar price was guaranteed for 2012-13, the bank said.
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