Informa Agribusiness Intelligence (Informa), a UK-based provider of analysis and forecasts across the agricultural and commodities value chain, has released its predictions that the global sugar market could experience a record year of production to 192 million tonnes by the end of this season.

Despite the massive production in this season, the sugar price is expected to remain stable mainly due to the notions that Brazil will produce less sugar in 2018/19 as ethanol is currently the more attractive product.

Informa’s report suggests that the sugar production in Brazil would remain constant as more sugar cane has been diverted towards ethanol production during the second half of the season.

One of the major reasons that Brazil is more focused on ethanol production over sugar is due to the high price of gasoline at the pump, tax structure, and the low sugar price.

According to the report, EU, India, and Thailand will be the biggest drivers behind the record sugar production this year.

In the EU, nearly 20 million tonnes of sugar will be produced by the end of the 2017-2018 year, which is an increase of 3 million tonnes compared to the previous year.

“Sugar producers in Thailand are expected to produce a record high of 12 million tonnes of sugar, which is 1.7 million tonnes more than last year.”

Sugar producers in Thailand are expected to produce a record high of 12 million tonnes of sugar, which is 1.7 million tonnes more than last year.

FO Licht senior commodity analyst Stefan Uhlenbrock said: “The link between oil prices and sugar prices in Brazil continues to strengthen in 2017/18 and, as the world’s biggest producer and consumer of sugar, this is determining global prices.

“Elsewher in the world, the outlook for sugar production remains strong, with record crops expected in many markets this year.

“This has already dragged prices lower. However, as Brazil is likely to produce less sugar in 2018/19 the market may have found a floor for now.

“Nevertheless, consumers in most markets can look forward to a year with rather low sweetener prices.”

FO Licht is part of Informa’s Agribusiness Intelligence.