by SignalFactory · October 18, 2019 | 07:36:03 UTC
Orive forecasts “a global sugar deficit of about 3.5 million tonnes in 2019-20,
growing to nearly 6 million tonnes in 2020-21, compared with global surpluses
of 2.1 million tonnes in 2018-19 and 9.7 million tonnes in 2017-18.”
“The world is still suffering from high accumulated stocks that
will need to be absorbed by the market before we can see any improvement on
price,” Mr. Orive explained.
Orive is optimistic because production from major sugar suppliers appears to be
declining, which will let stocks fall.
this sounds like the oversupply of recent years is in the process of turning
into a global deficit.
We’re getting killed with consumption. The “war” on sugar, including sugar taxes in many countries. Recent years have shown a trend toward a slow but steady erosion in consumption. Annual consumption growth was about 2% in the mid-2000s but currently is below 1.5%. A considerable part of losses in consumption growth rates can be attributed to a slowing down in global population growth. But the sugar and health debate is starting to take its toll with the 2019-20 growth rate close to 1.39%.
then you have the big picture supply-demand factors suggesting a gradually
declining demand for sugar. This obviously offsets the global deficit that is
unpredictability of the Sugar Market and How It Affects Our Sugar Price
to Jack Roney, director of economics and policy analysis for the A.S.A., the
global sugar market is the most distorted commodity market in the world because
of subsidies. “Today’s low prices are a result of these subsidies, and any
bullish signals can be quickly undone by government intervention.”
Unpredictability of the Sugar Market and How
It Affects Sugar Price Prediction
Roney said the extreme volatility of the world market is the reason the United
States has a sugar policy, and he urged governments around the world to put an
end to competing subsidies.
“U.S. farmers are highly efficient, and we want to operate in a
free market, but that cannot happen until all countries set aside their
subsidies and let a real market form,” he concluded.
obviously is a hugely important factor to take into account in the context of
our sugar price prediction. Supply-demand factors in the global sugar market
are certainly a leading indicator of the price of sugar. But an unpredictable
sugar market that can change fast, where the weather can turn the market upside
down, or a country suddenly can influence market dynamics makes a reliable
prediction extremely challenging.
As an illustration, this article on Indiatimes.com suggests that rising exports from India would lead to lower stock levels and consequently a mildly rising sugar price going into 2020. Based on a report the predicted sugar price rise is 8%.
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