Prices dropped almost 12 per cent last year as the global glut pushed prices to the lowest since 2008.
Jonathan Kingsman, Jamal Al Ghurair and Alexander Luneau, member of the exectuive committee, Tereos, at the 11th Kingsman Sugar Conference in Dubai on Monday. — Photo by Dhes Handumon/ Khaleej Times
Dubai — Sugar production is expected to fall for the 2015-’16 season but a price rally will have to wait, Jonathan Kingsman, founder of Kingsman SA, said in Dubai on Sunday.
In his welcome address at the opening of the 11th annual Kingsman Dubai Sugar Conference, Kingsman said global sugar production will fall short of demand by 5.2 million metric tonnes in 12 months.
It would be the biggest deficit since 2009-’10 after an almost balanced market this year. Prices have plummeted to new depths as markets around the world try to solve the sugar surplus. Prices dropped almost 12 per cent last year as the global glut pushed prices to the lowest since 2008.
More than 30 speakers, representing producers, importers, investment bankers, shipping companies, traders, analysts and associations, will offer views on sugar production, regional and global trade agreements, competition in ethanol, what lies ahead and market pricing, during the three-day conference.
Farmers from Brazil to Australia boosted output after prices reached a 30-year high in 2011 and that created sugar surpluses. Prices have fallen around 59 per cent since then.
Five producers, led by the world’s biggest grower Brazil, will have a more than 40-million-tonne stockpile in April and that will be enough to keep top consumer India supplied for 18 months, according to Platts Kingsman and US Department of Agriculture estimates.
“While the sugar market appears relatively balanced, it’s this balance that observers suggest could make the market in 2015 more reactive to any disruptions in supply or demand,” said Tim Worledge, Platts global associate editorial director of agriculture.
Al Khaleej Sugar, the region’s largest sugar refinery that supplies the international market with around 1.5 million tonnes of fine and course sugar, has been a regular part of the Dubai Sugar Conference since its launch 11 years ago.
Jamal Al Ghurair, managing director of Al Khaleej Sugar, said: “This event attracts the who’s who of the sugar industry. Not only is it an excellent platform for the exchange of ideas but also for the participants to work on their budgeting and planning for the year ahead. For Al Khaleej Sugar, this year will be different as we are looking forward to reflecting over the last 10 years and celebrating the progress of this conference.”
“2014 saw interesting variables in the sugar market and we look forward to new challenges in 2015,” Al Ghurair said.
Dubai’s Al Khaleej Sugar Refinery has 1.5 million tonnes of raw sugar, either stockpiled or on its way to the refinery, enough to meet its demand until the end of 2015, Al Ghurair said.