Thai Sugar Harvest Seen at Record Adding
to Global Surplus
By Supunnabul Suwannakij - July
11, 2013 8:40 AM ET
production in Thailand, the world’s largest exporter
after Brazil, may climb by 10 percent to a record in
the season from November as yields increase, according
to Thai Sugar Millers Corp. Futures declined.
will expand to 11 million metric tons, crushed from
the biggest-ever cane harvest of 105 million tons, Sirivuth
Siamphakdee, a spokesman for the Bangkok-based company
that represents the country’s 50 mills, said in an interview.
About 70 percent of output will be exported, he said,
giving the millers’ first estimates for coming year.
supplies will add to a global surplus that pushed futures
to a three-year low yesterday, helping to curb global
food costs. A weakening Brazilian real has boosted speculation
that the biggest grower will raise exports, while a
Bloomberg survey this week showed that the Indian crop
will top demand after the best start to the monsoon
in more than a decade.
surplus expected for 13-14 will continue to put pressure
on prices,” said Tom McNeill, a director at Brisbane,
Australia-based researcher Green Pool Commodity Specialists
Pty. “The market is strongly signaling to producers
to reduce production, not to increase.”
are heading for a third year of declines, the worst
run since 1992, and sugar is the worst performer after
coffee and corn on the Standard & Poor’s GSCI Index
of raw materials over the past 12 months. Prices that
rose to 36.08 cents in 2011 spurred farmers from Brazil
to China to boost planting.
for delivery in October dropped to 16.19 cents a pound
on ICE Futures U.S. yesterday, the lowest price since
July 2010. The contract traded 0.3 percent lower at
16.20 cents at 8:38 p.m. in Singapore today, reversing
an earlier gain.
rainfall this year will help boost production in the
upcoming season to a record,” Sirivuth said by phone,
forecasting that the average yield may climb to 105
kilograms per ton of cane from 100.24 kilograms. “We
aim to increase production yield by ensuring enough
water supply, educating farmers on growing techniques
and reducing cane burning.”
global sugar surplus is on the way, bolstered by good
weather in India and Brazil, Shawn Hackett, president
of Hackett Financial Advisors Inc. in Boynton Beach,
Florida, said in a report e-mailed on July 8. The London-based
International Sugar Organization said on May 22 that
world output will top consumption by 10 million tons
in the 12 months ending Sept. 30.
in India, the second-biggest producer, will total 23.5
million tons in the 12 months from Oct. 1, according
to the median of estimates from four traders, five millers
and two industry executives in the survey. That compares
with a crop of 25 million tons this year and domestic
demand of 23 million tons.
Brazilian real weakened to a four-year low this week,
creating an incentive for exports sold in the U.S. currency.
It makes sense to produce sugar and have it for shipment,
according to Judy Ganes-Chase, president of J. Ganes
food costs tracked by the Rome-based Food & Agriculture
Organization dropped for a second month in June, declining
to the lowest level since February.