News
05.11.2009
Sugar Output May Rise Next Year on Higher Price, JPMorgan Says
Global sugar production may increase in the second half of 2010, driven by higher prices and improved weather conditions, JPMorgan Chase & Co. said.
Output may rise to 165 million tons in 2010, compared with consumption of 160 million tons, the bank said in an e-mailed report dated Nov. 4. That’s up from production of 151 million tons in 2009 and demand of 158 million tons, it said.
“The global sugar balance sheet will tighten severely this year but can ease away from critical levels with the recovery in production in the 2010-2011 year,” JPMorgan’s Tobin Gorey, global commodity strategist, wrote.
Sugar prices have doubled this year as adverse weather in Brazil and India, the world’s top two producers, added to concern global demand would exceed supply. Sugar is the second- best performing commodity in the past year, behind zinc.
“Next season’s prices will move higher with a spike too but there’s a limit to how long they can sustain very high levels,” Gorey said.
Sugar futures for March delivery fell 1.6 percent to 23.59 cents a pound on ICE Futures U.S. in New York when last traded yesterday. Prices may reach 26 cents a pound in first quarter 2010, before falling to 19.8 cents a pound in the fourth quarter, JPMorgan said.
Output in Brazil, the world’s largest producer, may climb to about 36.5 million tons next year, while India’s production, may rise 7 million tons to 23 million tons, it said.
Bloomberg
