Insight Focus
- Global sugar production is set to be the second highest on record.
- This has contributed to a slight sugar production surplus.
- High cane returns to China to boost planting for the coming season…
2023/24 at a Glance…
Global Sugar Production
The world will produce 179.7m tonnes of sugar in 2023/24. This is the second-highest amount on record and is up 1.3m tonnes from our previous estimate.
This increase is due to favourable weather conditions in Centre-South (CS) Brazil, which is on track to produce 41.5m tonnes of sugar this season. Furthermore, we think rains in the latter half of the season in Thailand could increase cane yields, and we’ve added 0.5m tonnes sugar to our previous forecast.
As the beet harvesting season in Europe draws to a close, many countries have had a successful harvest despite increased rainfall at the tail end of the season. Russia has had a fruitful year, with yields exceeding our previous expectations.
Several northern hemisphere countries have just started crushing new-season sugar cane. Increased domestic cane prices in places like China and Thailand should prompt farmers to expand their cane acreage. This could mean increased sugar output from these regions, boosting global sugar production in 2024/25 towards 180.2m tonnes.
Global Sugar Consumption
Global sugar consumption has continued to grow even in the face of high prices. We think the world will consume 178m tonnes of sugar in 2023/24, a 1.1% increase on the previous year. This means that sugar consumption is growing in line with the world’s population and per capita sugar intake is not growing.
This trend will probably continue into 2024/25, resulting in an additional 2m tonne consumption.
A Small Sugar Surplus
Upward revisions to our production forecasts for CS Brazil, Thailand, and Russia have resulted in a global sugar production surplus. While this sounds negative for sugar prices, global sugar stocks on a per person basis remain low, and the growth in sugar production and stocks is largely located in Brazil, where there are logistics constraints getting this sugar to where it’s needed in the world market.
We also note that global sugar production remains near the middle of its 12-year-old 160-190m tonne range, despite a sugar bull market that’s lasted almost 4 years. The sugar market remains extremely fragile.
Production Update: China
Sugar production in China is set to reach 9.8m tonnes in 2023/24, up 0.8m tonnes from the previous season.
China is a sugar deficit country, and despite sugar prices being high for the past three years, production has remained broadly unchanged between 9-10m tonnes. This season’s weather conditions have been favourable, allowing production to recover and reach 9.8m tonnes.
Guangxi is China’s largest sugarcane and sugar producing region, accounting for 60% of the country’s total sugar output. We expect cane acreage in this region to increase in 2024/25 as a result of higher cane returns.
Other Sugar Producers at a Glance…
If you have any questions, please get in touch with us at Will@czapp.com.
