World Sugar Production to Drop Most on Record, Czarnikow Says

By Rudy Ruitenberg
Feb. 25 (Bloomberg) -- World sugar production will fall the most on record this year as output declines in India and China, resulting in a greater supply deficit than expected, Czarnikow Group Ltd. said.
The global sugar deficit is expected to total 10.4 million metric tons in the 2008-09 season, compared with a November forecast that production would fall 5.8 million tons short of consumption, Czarnikow analysts led by Toby Cohen said in a report published today.
Lower crops in India, Pakistan and China, along with reforms to the European Union sugar industry, will contribute to a 15.2 million-ton decline in production, according to Czarnikow. Demand is expected to rise 1.5 percent, the report said.
“Though the end of the global 2008-09 crop cycle is still several months away it is already very clear that this has been a bad year for sugar production,” the analysts wrote. “It is difficult to see a quick rebound from this season’s fall in production.”
While production in Brazil is expected to rise by 170,000 tons to 33.69 million tons, the outlook for the Indian crop has been deteriorating since the season began in October 2008, Czarnikow said.
Brazil is the world’s largest producer of sugar followed by India.