Australian sugar production at its lowest in a decade

The Australian Bureau of Agricultural and Resource Economics and Sciences says the price for sugar will ease through the remainder of 2011 and into 2012, as production in countries like Brazil and India recovers.

Over the past several years, the sugar price has been volatile.

Brazilian sugar production is expected to rise 8 per cent this season, and in 2011-12 the stockpile of sugar is forecast to be about 6 million tonnes. The price will fall, says ABARES, in response to the expected increase in world stocks.

Sugar production is expected to tip 168 million tonnes in 2010-11, which is 7.4 million tonnes higher in 2009-10 and it's happening in response to higher prices.
Production in countries like Australia, Brazil, China, Pakistan and Thailand were hit because of bad weather.

In Australia, ABARES says production will be about 3.6 million tonnes in 2010-11, about 0.9 million tonnes lower than in 2009-10. That's the lowest amount of sugar produced since 1991-92.

In 2011-12 sugar production is expected to recover a little to 3.85 million tonnes. But ABARES says excessive rain in February to April in Queensland prevented new plantings and damaged existing crops.

Cyclone Yasi did even more damage, reducing yield potential by about 30 per cent.

Looking beyond the next few seasons, the sugar price is expected to decline from its current highs as sugar stockpiles grow. But ABARES notes growing income in developing countries will provide support for the price as people eat more of it.

World sugar consumption is tipped to increase 2.5 per cent a year over the next 10 years, which is faster than world population growth of 1.2 per cent. ABARES says a characteristic of sugar consumption is that it's falling in richer countries, but rising in developing nations.

(Source: http://www.abc.net.au/rural/news/content/201103/s3151425.htm)