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Global sugar supply to improve as output rises in Asia, Europe – broker

NEW YORK, Oct 5 (Reuters) – The world’s sugar supply balance is expected to improve in the 2021/22 season that started this month due to higher production in Asia and Europe, which will partially offset another poor year in Brazil, broker StoneX said in a report on Tuesday.

Despite the improvement, the season will still see demand surpassing production for the third consecutive year, the report said, projecting a supply deficit of 800,000 tonnes in 2021/22 compared to a deficit of 2.9 million tonnes in 2020/21, meaning stocks will continue to decrease.

Thailand’s sugar production is seen jumping 39% in the new season to 10.5 million tonnes, while India is expected to have another large crop at 31.5 million tonnes, 2% more than the previous, due to overall favorable weather conditions in Asia.

Indian production would have been higher, StoneX says, if not for a diversion of sucrose to ethanol production equivalent to 3 million tonnes of sugar.

“There continues to be strong stimulus to ethanol production in India. Mills there are receiving around $2 per tonne more to make ethanol instead of sugar,” the analyst said.

In its first estimate for the next Brazilian crop, it projected centre-south (CS) sugarcane crush at 565 million tonnes, 6% more than this year’s crop that was hurt by drought and frosts.

Brazil’s sugar production should improve 2% to 34.2 million tonnes, while ethanol output is seen rising 5.5% to 29.7 billion liters.

Brazil’s ethanol production growth, however, is due to higher volumes from corn processing plants. StoneX sees corn-based ethanol production to jump 12.8% in 2022/23 (April-March) to 4 billion liters.

Sugar production in the European Union plus United Kingdom area is projected to rise nearly 12% in 2021/22 (Oct-Sept) to 17.2 million tonnes, as a wetter summer in Europe boosted yields for beet.

(Reporting by Marcelo Teixeira, editing by Ed Osmond)

((marcelo.teixeira@tr.com; +1 332 220 8062; Reuters Messaging: marcelo.teixeira.thomsonreuters.com@reuters.net – https://twitter.com/tx_marcelo))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The above news was originally posted on www.nasdaq.com

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