The global sugar surplus is forecast to halve to around 3 million tonnes in 2012/13 (October-September) from a surplus of 6.5 million tonnes in 2011/12, the International Sugar Organisation (ISO) said on Friday.
The London-based ISO said in its latest quarterly report that key producers were unlikely to increase their output to keep pace with a 2 percent rise in annual demand.
The incentive for growers to plant sugar has declined as prices of the sweetener slid to 20-month lows this week due to expectations of big harvests this year.
The ISO's initial working assumption is that world sugar consumption in 2012/13 may grow by about 2.1 percent to reach 170.9 million tonnes, up 3.5 million tonnes from this season.
This compared to this season's expected output at 173.8 million tonnes, raw value, a new record world output.
"Therefore, if world production remained stable at the estimated level for this season, the world sugar economy would face a statistical surplus of about 3 million tonnes (in 2012/13)," the report said.
The ISO raised its forecast for the 2011/12 global sugar surplus to 6.5 million tonnes from its previous forecast of 5.2 million tonnes, made in February.
"We have revised world totals for both consumption and production," the ISO said.
"Production revisions have brought an increase in the global surplus of 0.827 million tonnes, while the downgrades of consumption are responsible for a 0.475 million tonne increase in the statistical surplus."
The ISO said the new production record (in 2011/12) of 173.8 million tonnes was projected despite a significant decrease in sugar output anticipated for Brazil.
"Most of the increase is expected to come from beet sugar production with a year-to-year growth of more than 6.4 million tonnes, while world cane output is likely to demonstrate a more modest 3.3 million tonne increase," the ISO said.
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