Record world sugar production is forecast

The USDA Foreign Agricultural Service 'Sugar: World Market and Trade' review predicts record world sugar production for 2002/03 and a lowering of world import demand in Russia and the Ukraine. As a consequence, a downward pressure on world market prices is expected. Forecast world production for 2002/03 is set at 138.8 million tons, up 4.9 million tons. Brazilian production is forecast to increase for the second year in a row, while EU production is expected to rebound by 1.5 million tons from last year's low of 16.2 million tons. World exports for 2002/03 are forecast at 43.8 million tons, up 3.4 million tons or by 8% of the revised 2001/02 estimated production. Comment: With its low cost structure of production, Brazil is, not surprisingly, the largest world exporter. The EU, despite its high average productions costs, is the second largest exporter. This is a direct consequence of the 'cross subsidisation' of 'C' sugar exports from the prices paid for 'A' and 'B' quota sugar and the large volume of export refunds devoted to the sugar regime. Ironically, despite Africa having a significant number of low-cost producers, the 13% of world sugar imports which the continent accounts for is largely catered for by subsidised EU sugar exports.The USDA Foreign Agricultural Service 'Sugar: World Market and Trade' review..