Rabobank Raises Sugar Price Forecast Expected Global Sugar Price Rise

On September 30, Rabobank (Rabobank) raised its forecast for sugar prices, saying it was due to extreme weather in Brazil and India, the main producing countries.

The bank raised its estimate for raw sugar futures in New York by 0.60 cents a pound. It raised its estimate for raw sugar prices next summer to 12.40 cents a pound, up from 12.20 cents on Monday in the July 2016 contract. "Support for sugar market fundamentals is improving," the bank said."

the bank expects a shortfall of 4.8 million tons of global sugar production in 2015/16, which is larger than other agencies' estimates. Platts Kingman, for example, expected a shortfall of 3.2 million tonnes two weeks ago.

Rabobank said: "India and Brazil and other major producing countries are experiencing extreme weather. With the further strengthening of the El Niño phenomenon, the supply shortage caused by production cuts may further intensify." Rainfall in south-central Brazil has been affected by the El Nino phenomenon, and the remaining sugar cane harvest in the region is still at risk.

In India, the second largest sugar producer, the country's sugar output in 2015/16 may be less than 27 million tons, down 5% from the previous year, mainly due to insufficient precipitation in the rainy season. The rainy season precipitation in Uttar Pradesh is only 54% of the normal level, while the precipitation in Maharashtra is 70% of the normal value.

Verma, director Abinash of the Indian Sugar Mills Association (ISMA), also said on Monday that India's sugar output in 2015/16 is expected to be 27 million tons.

Source: Yunnan Sugar Net | Editor: Zhai Tianchang