According to the latest quarterly market outlook report from the International Sugar Organization (ISO), the deficit in 2020/21 increases to 4,782 million tons, from 3,504 million tons in November 2020. The Sugar production falls to 169,040 million tons, more than 2 million tons since November, due to the lower European production, 1,286 million tons.

Consumption in 2020/21 was revised downward, but remains 2.08% above 2019/20. The 2020/21 review is based on the impact of COVID on travel, specifically focusing on changed consumption patterns while away from home. Other changes include higher consumption in Western Europe, due to Brexit, and a reduction in consumption in China.

The global trade balance is neutral following the upward revision of exports, driven by higher production from Brazil in October and large carry-over stocks. Meanwhile, the estimate for Indian exports was revised upwards to 1,753 million tonnes, thanks to government support for exporters.

The stock / use ratio to end 2020/21 was 53%, 4% less than last season, but in historical range.

Futures market prices have risen 12% since the last report, in part due to a weak dollar and strong commodities. Our fundamental outlook (from current levels) is neutral due to balanced trading and comfortable values.

Global ethanol consumption in 2021 has been estimated at 103.5 billion liters (7.6 billion more in 2020, but 6 billion less than in 2019), and production is projected to reach 106 billion liters. US production will rebound to 56.8 billion liters, still below the 2018 high of 60.8 billion liters, while Brazil is expected to produce 31.5 billion liters, down from the 2019 high of 35.2 billion liters, even with a slightly higher ethanol allocation in CS Brasil. An adjusted domestic ethanol balance is expected for Brazil in the next cycle.

The relaxation of molasses prices has intersected with the increase in sugar prices on a sugar equivalent basis. Production will increase by 202/21 to 47.8 million tonnes, while use has had little impact from COVID or African swine flu in Europe.