A Final Look at the 2014/15 Season: Strong Production

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We’re coming to the end of the 2014/15 season, the fourth successive year of global production surplus, and the market is trading at 6-year lows. That sentence above tells you everything you need to know about where the market has been.

2014 was resolutely negative. The raws flat price ended the year 12% lower than where it began. All of the New York spreads traded to deep discounts in an attempt to handle the surplus. Even the white premium was weak for much of the year as the stocks built not just in the raws market, but also in the whites market. 2014 was the year that the surplus spread through the sugar supply chain. 

Already 2015 feels different. You wouldn’t know this from a cursory glance at the flat price, which has traded below the 2010 13c low, helped in no small part by USD strength. But we have just seen the first spread to expire at a premium since May 2013, with the expiry of the March/May at +16 points. Does this indicate the market is now in transition? 

“Production is close to record levels. However, lower prices mean that investment in expanding production further has slowed drastically. ” 

Stephen Geldart, Analysis Manager


  • 2014/15 production forecast at 185.2m mtrv (metric tonnes raw value), the second highest on record. (2013/14 = 184.7m) 
  • Beet sugar production of 38.7m mtrv second best in recent memory (2013/14 = 35.5m mtrv
  • Cane sugar production of 146.5m mtrv is also impressive (2013/14 = 148.5m mtrv


  • Global consumption to grow 2% in 2015, to 182.6m mtrv 
  • 2014/15 remains in surplus, by 1.6m mtrv 


  • Indian production at 30.1m mtrv would be the second highest ever (2013/14 = 26.8m mtrv
  • Record Maharashtra production expected, at 10.1m tonnes. 
  • This is the fifth successive year of Indian surplus. 
  • Domestic prices are below cost of production but above world market; stocks are building. 
  • The key question is how long the government will be willing to prop up the sugar industry. 


  • Worst crop in 4 years. 
  • Cane acreage falls as cane prices paid to farmers are lowest in 3 years 
  • As farmers switch to other crops, mills are becoming more pessimistic about prospects for 2015/16 
  • We expect 2014/15 production in the key state of Guangxi to be 24% below last year’s at 6.5m tonnes. 
  • We expect overall Chinese production to reach just 11.4m mtrv (14.5m in 2013/14) 
  • Consumption forecast to rise 3.5% to 17m mtrv in 2015. 
  • This gives the largest domestic deficit we have ever seen for China, at more than 5m tonnes. 


  • Cane crush of more than 100m tonnes expected; possibly a new record crop. 
  • Sugar production estimated at 11.4m mtrv (2013/14 = 11.9m mtrv
  • Low world market returns mean that mills will struggle to pay provisional cane prices 
  • The government will probably need to intervene to ensure growers are paid. 
  • An increase in industrial demand is expected to see consumption increase by 5% to 3.5m mtrv 


  • 6.6m mtrv production expected; similar to last year’s. 
  • Much depends on weather between now and the end of the crush. 
  • Mexican consumption forecast at 4.5m mtrv, up 1.3% on last year’s. 

“We do not expect to see any new mills come on stream this year, down from a peak of 29 in 2008/09. Investment in the field, in machinery and in sugar infrastructure globally has fallen to minimal levels. This leaves the market poorly placed to respond to deficits in the future.” 

Ana Carolina Ferraz, Analysis Manager


  • We expect production to be almost unchanged year on year at 3.1m mtrv
  • Production is more heavily skewed towards whites – up 16% YOY. 
  • This probably follows the difficulty seen in shipping raw sugar by the Trade in 2014. 
  • We see 4% consumption growth in 2015, to 0.8m mtrv 

CS Brazil 

  • An increase in cane crushing and sugar production is expected in 2015/16 
  • Following good weather we expect cane availability to approach 600m tonnes, compared to 571m tonnes crushed last year. 
  • Sugar production should rise from 32m tonnes to 33m tonnes in 2015/16. 


  • Despite world market prices falling below 13c global sugar production remains less than 1% below the all-time high. 
  • It’s consumption growth which is pushing the balance sheet back towards deficit. 

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