The third year in a row of steadily increasing global demand for sugar, forecast to reach a record 174 million tonnes in 2016/17, is eating through stockpiles that began to pile up in 2012, says USDA. “Consequently, stocks are approaching what appear to be historically low levels,” said the semi-annual Sugar: World Markets and Trade report.
World sugar prices fell below 11 cents a pound in 2015 and now are near 17 cents. “As prices react to high demand and as the Brazilian real struggles to find equilibrium against the dollar, market returns are needed to provide incentives for producers to catch up with demand,” says the report. Brazil is the largest sugar grower and exporter in the world, responsible for one-fifth of production and nearly one-half of world trade in sugar.
The largest consumers are India, the EU and China, in that order, using nearly 4 of every 10 pounds of sugar in the world. World sugar production is forecast for 169 million tonnes in the year ahead and consumption for 174 million tonnes.