Sugar rush: Developing nations lead the charge in sugar production

Global output to increase by 5%, led by Pakistan and India.

KARACHI:

Developing countries are leading the charge in sugar production and are forecasted to harvest 131 million tons in 2011-12, 1.2% more than in 2010-11, led by a rise in India and Pakistan whereas developed countries are anticipated to expand their production by 17% to 42 million tons , United Nations Food and Agriculture Organisation (FAO) said in its report.

Sugar production will rise in India, Pakistan, Russia and the European Union (EU) member states and global production is likely to rise by 5% to 172.8 million tons in the marketing season (October- September) of 2011-12. Downward revisions in output in Brazil, Mexico and United States were offset by upward revision in EU, Russia and Pakistan.

FAO said that Pakistan’s sugar output is expected to reach 5.2 million tons in 2011-12 from 4.4 million tons last year. Indian sugar production is pegged at 28.1 million tons for the current marketing season from 26 million tons for period 2010-11.

Global sugar production stood at 165.1 million tons in 2010-11 marketing year. FAO’s current estimate for global sugar production in 2011-12 stands at 173 million tons, relatively unchanged from November 2011 forecast, but 4.6% larger than in 2010-11.

FAO expects global sugar consumption to rise to 167.4 million tons in current season on back of low prices and increased availability. Surging supply and lower prices are expected to support larger sugar intake than in the previous season. In 2009-10 and 2010-11, high domestic sugar prices curtailed demand in virtually all regions.

World per capita sugar consumption will remain steady at 23.8 kilogrammes in 2011-12. Despite rising sugar consumption, global economic slowdown could hamper demand growth, according to FAO. “Aggregate sugar utilisation in developing countries is set to expand by 2.4 million tons to 118 million tons, or 70.4% of global consumption. In generally more mature developed markets, sugar consumption is set to increase by 1.3 million tons.

“However, a slowdown of global economic growth in 2012 can undermine prospects for demand expansion, as manufacturing and food preparation sectors, which account for bulk of aggregate sugar consumption, are particularly sensitive to income changes,” FAO report said.

Published in The Express Tribune, June 19^th, 2012.