Global sugar body sees prices subdued this year on surplus.

After two years of deficit, the global sugar market is likely to post a surplus in 2017-18 (Oct-Sep). The surplus expected had dragged front-month raw sugar contract on Intercontinental Exchange to a 16-month low of 12.53 cents a pound in June. Though prices have since recovered to over 14 cents, they are likely to trade in a narrow range of 12.55-18.20 cents a pound over the next few months. Sugar prices are likely to remain in a range as the global sugar production is seen at a record high this year. International Sugar Organization has pegged global 2017-18 sugar output at a record high of 179.30 million tonne, up 11.5 million tonne from this year, driven largely by production increases in India, Thailand, China and EU. Sugar output in Brazil, the world’s largest sugar producer and exporter, is expected to be only marginally higher at 36.2 million tonne, while that in European Union it may rise to 18.64 million tonne, much higher compared to 15.9 million tonne produced in 2016-17.