World sugar production is likely to hit a record 187.6 million tonnes this year on account of increase in output in India, the EU, Thailand and China, according to the Food and Agriculture Organization (FAO).
Global sugar trade is expected to contract by 4.10 per cent to 55.5 million tonnes in the 2017-18 marketing year (October-September), from 57.9 million tonnes last year because of surplus availability, it said.
In its latest report, the UN body has forecast world sugar output to hit a record high at 187.6 million tonnes in 2017-18 and surpass consumption, with the anticipated surplus likely to be the largest in history.
Sugar output across the world stood at 168.9 million tonnes during 2016-17 marketing year.
With regard to global sugar consumption, it is likely to increase to 170.6 million tonnes in 2017-18 from 166.8 million tonnes last year, it said.
"World sugar consumption is set to grow in line with its long-term trend, reflecting increases in several developing countries sustained by lower domestic sugar prices, ample domestic availabilities and improved economic performance," it said.
Sugar consumption growth will be particularly marked in Africa, Asia and South America, it added.
As far as global sugar trade is concerned, the FAO said, "Sufficient domestic supplies in traditional importing countries are expected to lead to a contraction in global import demand relative to the last marketing season."
The implementation of import restriction measures in some main markets is also anticipated to constrain the volume of trade, it said.
Exports are anticipated to fall in Brazil, the world's largest sugar producer and exporter; but to rise in Thailand, the second largest sugar exporter, prompted by abundant sugar stocks, it observed.
One noteworthy development in the international sugar market, the FAO said is the return of the EU to the ranks of the top four largest sugar exporters, following the removal of the long-standing EU sugar quota regime.
On sugar prices, the FAO said they have followed a declining trend in the international market since the beginning of 2018, extending the steady fall that has characterised the market since mid-2017.
"The price slide this year is mainly associated with prospects of large sugar availabilities, following a robust expansion in area planted to sugar crops in the past two years," it said.
The policy measures to curb imports, or boost exports, as well as the strength of the US dollar, particularly against the Brazilian Real, have further exacerbated the fall in international sugar quotations.
On the other hand, rising international crude oil prices are foreseen to sustain indirectly sugar price quotations, as increasing quantities of sugar crops are being utilised for the production of ethanol instead of sugar, it added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)