A soft commodity is a grown agricultural commodity such as coffee, cocoa, sugar, and fruit. In addition to being the world’s second-largest producer of sugar, Brazil is second in ethanol production only to the United States. “(The) size of the 17/18 crop year surplus...was so big that it was bound to force change quickly,” Green Pool said. Seasonal cereals, snacks and sweets debut at retail. There, farmers are guaranteed prices for their cane crops, largely due to political reasons, and these price guarantees have continued to climb despite downward market signals and increasing cane production. China produced 10.6 million metric tons of sugar in 2018/2019. “A considerable part of losses in consumption growth rates can be attributed to a slowing down in global population growth,” Mr. Orive said. “Exports are lagging and stocks will undoubtedly finish the year high, continuing to pressure the government and mills.”. Brazil, the world’s biggest exporter, has seen production fall rapidly since 2017-18 with the majority of cane now being used to produce ethanol. Output from Brazil’s centre-south cane region is expected to rise to 29.6 million tonnes in 2019/20 from an expected 26.6 million tonnes in 2018/19. “Today’s low prices are a result of these subsidies, and any bullish signals can be quickly undone by government intervention.”. However, for 2019/2020, the country expects sugar production to drop by approximately 26%. The country’s 2018/19 production was seen at 33.5 million tonnes, down slightly from a previous forecast of 34.1 million tonnes. o Thailand is slashed 5.2 million tons to 8.3 million on lower yields due to drought. The nation is seeing record levels of sugar production due to increased sugar farmland and improved yields. With no drop in food production over that time, Brazil has proven its viability as an effective and efficient ethanol powerhouse. Beet sugar is primarily produced in northern Europe, in northern France, Germany, the Netherlands, Poland, and Belgium. Brazil has historically been the world's largest sugar producer but ceded second place to India in the 2018/2019 crop year. The largest sugar-producing countries are as follows: India became the world's largest sugar producer in 2018/2019, beating out Brazil for the first time in 16 years. The expected shortfall in 2019/20 is mostly due to expected output reductions in Thailand, Pakistan and India, it said. Production by the second biggest exporter, Thailand, is also down as farmers switched to alternative crops. A total of 124 countries produce sugar. ASHEVILLE, N.C. — World sugar supplies are expected to tighten as production declines in 2019-20, but large stocks and indications of declining demand growth may limit recovery in a market battered by low prices, said Jose Orive, executive director of the International Sugar Organization. 2019/2020 season suggest that world sugar consumption will surpass production, though by a relatively small margin, after two consecutive years of a production surplus. “We’re getting killed with consumption,” Mr. Orive said, noting the “war” on sugar, including sugar taxes in many countries. This marks a recovery from this season’s sharp decline, although drier-than-usual weather in December and January could dent production. Though China is one of the world's largest sugar producers, it is a net importer of sugar. See here for a complete list of exchanges and delays. This could help to bring about a more balanced market from the start of next season. Green Pool said it is “unusual” for the global sugar market to swing back to deficit after only two surplus seasons, but noted last year’s sharp drop in prices to below production costs curbed output. But he is optimistic because production from major sugar suppliers appears to be declining, which will let stocks fall. The tariffs expire in May 2020, and Chinese sugar mills will ask for an extension to preserve these tariffs in the hope for the continued protection of the domestic sector. That is 19% of the world's total sugar production of 179 million metric tons. By using Investopedia, you accept our. Reporting by Ana Ionova; editing by Jason Neely. • Current Report • Past Reports (USDA Economics, Statistics and Market Information System) That’s good news for global farmers who have been struggling as raw sugar futures dipped to near 10c a lb in September 2018 — well below the average cost of production. By continuing to browse the site you are agreeing to our use of cookies in accordance with our. “The global sugar market is the most distorted commodity market in the world because of subsidies,” noted Jack Roney, director of economics and policy analysis for the A.S.A. “This adds an element of risk to the 2019/20 crop, and perhaps also to the final figure for 2018/19,” Green Pool said. A crop year is a period from one year's harvest to the next for an agricultural commodity. Smaller portions point to consumer interest in health and wellness. Furthermore, the Thai sugar industry is expected to face further woes due to the oversupply of sugar from India and China's production. “(We) anticipate that there will have been lower planting due to some dry weather post-monsoon in 2018,” Green Pool said. Though not a specific country but rather a political and economic collection of individual countries, the EU is the third-largest producer of sugar. Agflation is inflation linked to increasing agricultural prices to manufacture food and alternative fuels, which can outpace rising prices of other goods. However, Brazilian auto fleets are fully equipped to run on ethanol so there is considerable domestic demand for the alternative fuel, which has resulted in a slight change towards producing more cane ethanol. PRODUCTION3 World sugar production to expand significantly in 2017/18 World sugar production is estimated by FAO to reach It also trimmed its projection for the global surplus in 2018/19 to 2.64 million tonnes from a previous forecast of 3.60 million. The country produced 29.5 million metric tons of sugar. SUGAR OECD-FAO AGRICULTURAL OUTLOOK 2019-2028 © OECD/FAO 2019 ago). In absolute terms, and when compared to the base period, major changes in global production are projected in India (+5.7 Mt), Thailand (+3.0 Mt), China (+2.9Mt) and Brazil (+2.5 Mt). “Government policies will continue, mainly for political reasons.”. Investopedia uses cookies to provide you with a great user experience. This statistic shows the sugar production worldwide in 2019/2020, by leading country (in million metric tons). Sugar production in the EU grew significantly in the 2017/2018 crop year. “It’s crucial the sector communicates better and is able to convey proactive messages based on facts and sound scientific evidence.”, We use cookies to provide you with a better experience. Approximately 80% of the world’s sugar is produced from sugarcane in tropical and subtropical climates with the remaining 20% derived from sugar beet, which is grown mostly in the temperate zones of the Northern Hemisphere. In 2017 and subsequent years, China added additional amounts to the 50%, whereby in 2019/2020, the total tariff for imports over the allowed quota is 85%. “World sugar prices have hit bottom, and signs are pointing to a recovery,” Mr. Orive said Aug. 5 on a panel at the 36th annual International Sweetener Symposium, sponsored by the American Sugar Alliance (A.S.A.). Its demand for sugar has grown significantly in the last decades. China allows for 1.94 million tonnes of sugar imports a year at a tariff of 15%, as a result of an agreement with the World Trade Organization. “Weather could provoke production variations, while consumption growth is declining as the war against sugar continues,” he said. This is because of droughts in 2018 that caused farmers to reduce sugarcane planting and because of floods in 2019 damaging crops. ASHEVILLE, N.C. — World sugar supplies are expected to tighten as production declines in 2019-20, but large stocks and indications of declining demand growth … farmers are highly efficient, and we want to operate in a free market, but that cannot happen until all countries set aside their subsidies and let a real market form,” he concluded. Recent years have shown a trend toward a slow but steady erosion in consumption, he said. Imports beyond that amount are subject to higher tariffs of 50% and require additional permits. A trade war arises when one country retaliates against another by raising import tariffs or placing other restrictions on the other country's imports.

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