Stock Market Tips- India set to overtake Brazil as largest Sugar producer in 2018-19
India, the world’s biggest consumer of sugar, is set to replace Brazil as its biggest producer too.
India is projected to have an output of 35.5 million tonnes in the 2018-19 season (October-September), breaking the record of 32 million tonnes in 2017-18.
Meanwhile, Brazil, which has a sugar industry that is largely unregulated, is expected to produce about 30 million tonnes of sugar in the 2018-19 sugar season (including North East Brazil), 22% lower than in the previous year.
The emergence of India as the biggest producer comes at a time when a large global surplus has prompted Brazil to divert sugarcane to ethanol production.
India, on the other hand, is struggling to manage its current stocks while staring at another record output.
Given the annual domestic consumption of about 25 million tonnes, a surplus of 10 million tonnes will be added to the system. When the industry ends the current year in September, it may have a surplus of 10 million tonnes.
That makes for a surplus of about 20 million tonnes by September 2019 unless the industry ships out a few million tonnes abroad. The country has never seen and handled such a large surplus.
But the Brazilian industry is sitting pretty. A recovery in crude oil prices this calendar year, along with a global surplus-led low sugar price, prompted sugar millers to make less sugar and divert more sugarcane for ethanol production.
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