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‘World sugar production to touch record 179.3 mln tonnes'

International Sugar Organisation(ISO) projects a strong production rebound for 2017-18 in India due to a good monsoon. On the sidelines of at Kingsman Sugar Conference in New Delhi, ISO Executive Director Jose Orive tells BK Jha about the prospects and growth

Jose Orive
Executive Director, International Sugar Organisation

ISO comes out with production estimates quarterly. What are production the latest estimates?

We come out with production estimates quarterly. As per our latest estimates which came out in July, world production in 2017-18 (October/September), is expected to reach a record high of 179.3 million tonnes. The increase will be up by around 11.5 million tonnes from the previous season. In 2017-18, five countries/regions- India, EU, Thailand, China & Brazil contribute an increase of 10.8 million tonnes. Pakistan could see a production loss of 0.7 million tonnes. Our next estimates will come in October, we fear some impact on production due to hurricane Irma in Caribbean. Crop damage in Florida, USA can also hit hard. Overall, we see a steady growth in production and consumption, going forward. 

How do you see India’s production?

India’s sugar output is expected to increase significantly and we estimate it to rise by about 22 percent to 25 million tonnes in the year beginning October from from an estimated 20.5 million tonnes in 2016/17. Uttar Pradesh and Maharashtra would contribute significantly in this increase. With this increase, I do not think India would need to import sugar. Hopefully, the world’s biggest consumer of the sweetener could export the commodity in 2018-19.

What are the factors responsible for higher production of sugar in India ?

As I said Uttar Pradesh and Maharashtra would contribute significantly because these states are investing to increase mills’ efficiency. A strong production rebound projected for 2017-18 is also due to a good monsoon and better yield from the new varieties of sugarcane, particularly in Uttar Pradesh. Reinvest always yield dividends. It would be turn around story. Year 2016-17 characterised by a significant domestic deficit of around 5 million tonnes. The government granted permission for imports of 500,000 tonnes. With a return to a more balanced market in 2017-18 imports of raw sugar are likely to be confined to the coastal refineries for re-export (after refining).

How do you see China’s import?

China is expected to import 6.1 million tonnes - 6.3 million tonnes of sugar in 2017-18, compared with 6 million tonnes a year ago. China will release 1.6 million tonnes of sugar from its state reserves in 2017-18, compared with 1.25 million tonnes a year ago. So we expect that a deficit of around 6.8 million tonnes in 2016-17 will be plugged by stocks releases (1.6 million tonnes) and around 5.3 mln tonnes of imported sugar. But the anti-dumping duty on out-of-quota raw sugar imports from 45 percent to 90 percent could cut back imports, especially from Thailand and Brazil. Imports from non-traditional origins could be boosted, for example those that could be displaced from the EU market.

How do you see growth in consumption in India as well as globally ?

In 2017-18 world sugar consumption is projected to grow by 1.77 percent to 174.7 million tonnes. The anticipated growth rate is more than the world 5-year average of 1.68 percent. Average annual growth rate in India for last five year is around 2.5 percent. Another statistical deficit reduced further the stocks-to-consumption ratio in 2016-17 by a significant 3.1 percentage points, to 50.9 percent. This is the lowest level since 2010-11.

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