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The International Sugar Organisation (ISO) has forecast there would be a global sugar surplus in 2010-11 with a rise in production in India turning the world's top consumer into an exporter.
"After two years of a large statistical deficit, the world sugar economy is facing a season with a production surplus over consumption," the ISO said in a quarterly market outlook. The ISO, in its first assessment of the world sugar balance for 2010-11, forecast a global surplus of 3.22 million tonnes compared with a deficit of 4.95mt in 2009-10.
Production was seen rising by more than 7% to 170.38mt and consumption climbing more slowly by around 2% to 167.15mt. The bulk of production increase was seen in India with 23-24mt as against 18mt in 2009-10.
The ISO forecast that India would have net exports of 945,000 tonnes compared with net imports of 3.3mt in 2009-10. Export availability of raw sugar was expected to exceed import demand by nearly 1.9 mt while for white sugar they were practically equal.
The ISO said the bearish pressure of the projected global surplus should be mitigated by the low level of stocks. "Major downward price corrections would be a surprise. On the other hand, a surplus is a surplus ... and further price advances are likely to be capped.
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