Global sugar glut may take two years to erode

Oct 30 | Updated: Oct 31 2007, 07:18am hrs
A global sugar glut may take as long as two years to erode because of record crops in India and Brazil, the International Sugar Organization said.

Supply will probably outpace demand by 11 million metric tonnes this year, Sergei Gudoshnikov, senior economist at the London-based group, said today in an interview. Thats equal to about 7% of annual consumption.

It cannot be absorbed in a matter of weeks or even months, Gudoshnikov said. Its very difficult to be optimistic. It could take between 18 and 24 months before the balance could be re-established.

White, or refined, sugar prices have slumped more than 40% since reaching a record in May last year. The gains prompted cane farmers in India and Brazil, the worlds biggest producers, to increase output.

India, the worlds second-biggest cane grower and top consumer, may produce a record 30 million tonnes of sugar this year, Gudoshnikov said.

Bloomberg