Sugar closing stock to fall sharply in 08-09

Written by Commodities Bureau | New Delhi | Updated: Nov 27 2008, 08:58am hrs
Indias sugar closing stocks in the crop season that will end on September 2009 is expected to fall to around 7.5 million to 9 million tonne, down from this years 11 million tonne because of low output and stable consumption.

According to an official assessment, estimated domestic sugar production in 2008-09 is expected to be in the range of 20.5 million to 22 million tonne, while consumption is projected to remain steady at around 22 million tonne.

This production when added to the carryover stocks of over 11 million tonne will maintain sugar availability of around 31.5 million to 33 million tonne, much more than the consumption, but what the low production will do is that it will eat into the next years closing stocks, a senior government official said.

Low carryover stocks next year could push up prices, but if production again crosses 25 million tonne in 2009-2010, then that spike would be controlled.

On the export front, government hopes that exports of sugar will fall down to around 2.0 million tonne from around 4.6 million tonne last year. This could be one of the worst years in terms of sugar exports as global prices are down, moreover, not many new buyers are planning to come to the market, a miller based in northern Indian state of Uttar Pradesh said.

According to the International Sugar Organisation (ISO), global sugar production in 2008-09 (October-September) is estimated to be around 1,58.7 million tonne against 1,66.5 million tonne in 2007-08.

Chinas production is estimated to come down to 15.7 million tonne from 15.9 million tonne, US 6.9 million tonne against 7.3 million tonne, Australia flat at 4.9 million tonne, Pakistan 3.5 million tonne against 4.1 million tonne, Philippines 2.2 million tonne against 2.4 million tonne.

However, Brazil, the largest producer is expected to produce around 32.4 million tonnes in 2008-09 compared to 32.1 million tonnes. In Thailand, sugar production is estimated to rise to 7.9 million tonnes against 7.8 million tonnes and similarly in Indonesia's production will rise to 2.0 million tonnes against 1.9 million tonnes.