Global sugar deficit forecast but La Nina gives Aussie growers a boost

In further good news, the specialist agribusiness bank expects limited impact on Australian sugar exports as a result of Chinese trade friction, with China accounting for only 5.6 per cent of Australian sugar exports, on average, over the past five years.

Rabobank commodity analyst Charles Clack is also forecasting a global sugar deficit of 0.3 million metric tonnes raw value (mtrv) for 2020/21.

Mr Clack said that was despite an expected increase in world-wide sugar production, which, he says, will be offset by a projected 1.7pc year-on-year recovery in global consumption.

This follows an estimated 1.8 million mtrv global sugar surplus recorded for the 2019/20 (October - September) season.

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Mr Clack said production increases are particularly expected this season in China, India and Pakistan, and also in North America, as crops there recover from recent years of drought.

"At the same time though, we expect a recovery in global sugar consumption from last year's rates which were hit by the impacts of the coronavirus pandemic," he said.

"That said, our consumption forecasts for 2020/21 have been tempered slightly, given the second wave that is occurring in many parts of the world."

For Australia, the report says, the country's 2020 sugar crush - which ended in early December - would result in cane volumes of just over 31 million metric tonnes (mmt) - up four per cent on the previous year.

Actual sugar output is expected to total more than 4.3 mmt for the season.

Area in Australia planted to cane remains under pressure - falling an estimated 3pc year on year in the 2020/21 crop year and 10 per cent since 2016/17.

The report noted that was expected to continue in 2021 as growers favored higher returning crop alternatives.