The world sugar market is poised for two consecutive years of surplus production, following a surge in output from Thailand and India, Rabobank said on Tuesday.
The global market is likely to see a sugar surplus of 10.5 million tonnes, raw value, in the 2017/18 season due to "enormous" harvests in the two countries.
This was up 3 million tonnes from the group`s previous quarterly forecast, with Rabobank signalling it was almost entirely due to revisions to its Indian and Thai production expectations.
"These crops haven`t been merely big, they have both been enormous," the group wrote in its Q2 sugar update.
The glut is expected to be followed by another surplus of 5 million tonnes in 2018/19, despite a projected overall decline in global production.
Indian output in the 2018/19 season is seen at 35.5 million tonnes, up from 34 million tonnes in 2017/18.
Thai sugar output is expected to decline slightly to 14.5 million tonnes, from a record 15.7 million tonnes produced in the 2017/18 cycle, Rabobank said.
EU sugar production is seen at 20 million tonnes in 2018/19, down from 20.9 million tonnes in 2017/18, the first post-quota season for European farmers.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)