It is reported by Nasdaq.

Sugar consulting firm CovrigAnalytics said in a report that it expects a global supply deficit of 2.2 million metric tons (MMT) in 2023/24, while broker and supply chain services provider Czarnikow sees a deficit of 900,000 tons.

CovrigAnalytics updated its production estimates with cuts in Thailand (-2.52 million tons), India (-1.1 million tons), Pakistan (-505,000 tons), China (-304,350 tons), the Philippines (-225,000 tons), Mexico (-215,000 tons), the European Union (-250,000 tons).

«These cuts in output expectations are mainly due to dry weather impacting the crops and to lower acreage (in some regions). The El Nino phenomenon might further hamper the development and harvesting of these crops in August-April», — the company said in a report.

Brazil's center-south crop was raised to 38.7 million tons from 33.8 million tons in the previous season as mills are earmarking as much sugarcane as possible to sugar production and the weather has been favorable.

CovrigAnalytics said that mills in Brazil are investing in more sugar production capacity to be able to use as much as 55% of sugarcane to produce sugar in a few years.

Czarnikow said that production in Thailand will be the lowest in a decade at only 7.4 million tons versus 10.8 million tons in the previous season.

«This is driven by a combination of hot, dry, weather hindering cane development, and a large move by smaller farmers to planting cassava instead of sugarcane», — the broker said in an update to its global sugar estimates.

Czarnikow said the world will consume a record amount of sugar in 2023/24, at just over 179 million tons, due mostly to population growth that requires 2 million tons of additional volume every season.