Global sugar supply is soaring again
andprojectsasurplusrelativetoconsumption,witha
natural influenceuponthebehavioroftheprices
Sweet
world
A
fter a short period of global def-
icit, when prices soared, the
world of sugar is once again
taking advantage of bigger sup-
plies and surpluses, according
to projections for the 2017/18 crop year (Oc-
tober/September). The US Department of
Agriculture (USDA), inMay 2017, anticipated
a5.16growthintotalproductionofthecom-
modity, to 179.6 million tons, whilst con-
sumption was estimated to remain at the
same levels of the previous period.
In the 2015/16 and 2016/17 growing sea-
sons, production was smaller than demand,
butinthecomingseasonitissupposedtosoar
in several relevant countries, with chances to
outstrip consumption. Even if in Brazil, global
leaderinthesector,nobigchangestakeplace,
the second and third biggest producers, In-
dia and the European Union, should increase
their crops expressively, with respective rates
close to 18%and 13%, and a similar situation
should occur in other countries, like Thailand,
secondbiggestexporter,andChina.
Indiaisshowingarecoveryinplantedarea
andproductionafteracropmarkedbyclimate
relatedproblems, and the sameholds true for
Thailand and China. The European Union,
where sugar ismade frombeets, is signalinga
biggerplantedareaandbiggerproductionvol-
umes.Thebulkofglobalsugarsupply(around
78percent)comesfromsugarcane,whereBra-
zil is also the leader, followed by Asian coun-
tries. In Brazilian soil, a small reduction in the
supply of raw material is projected, but the
main derivative should keep levels similar or
closetothepreviousseason.
Along with the estimated growth in glob-
al production and in outstripping the con-
sumption levels, the USDA was projecting
an increase in exports and decrease in im-
ports, with lower ending stocks, but similar
to the previous crop year. In the meantime,
in early 2017, the influences upon the pric-
es practiced in the international market had
already unfolded. Flávia Machado Starling
Soares, from Conab, registered a downward
trend in June “due to the expectation for sur-
pluses in global supply”, amid other factors,
citing an annual reduction of 30 percent on
the monthly quotes in New York (US$ 13.53/
pound, the lowest in thepast 16months).
RISINGETHANOLPRODUCTION
In the other relevant sugarcane deriva-
tive, ethanol, where Brazil occupies the po-
sition as second biggest producer in the
world, while the leading producer, the Unit-
ed States, makes this fuel from corn, and its
production is also on the rise. From 2015
to 2016, there was an increase of 3.5%, ac-
cording to data released by the Renewable
Fuel Association (RFA). The two countries
account for 85 percent of the global supply,
and the United States’ share reaches 57.6
percent of the total. Since 2008, consump-
tion inBrazil has been experiencing ups and
downs, but the main supplier has shown a
growth in annual demand.
n
Sílvio Ávila
25
tanques de etanol
Ethanol tanks
Produção mundial do
biocombustível (Milhões de L)
Fonte:
RFA.
Anos
2015
2016
Total
97.220 100.627
EUA
56.050 58.026
Brasil
26.850 27.614
UE
5.250
5.212
