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[20.09.2005] World Sugar Output to Set Record in 2005/06, ISO Says (Update1)

/Bloomberg/ World sugar production in the crop year that begins in October will rise to a record as India's output gains, the International Sugar Organization forecast.
Sugar output in 2005/06 will increase by 5.09 million metric tons, or 3.5 percent, to a record 149.55 million tons, the London- based group of sugar consuming and exporting nations said in its quarterly market outlook today.
The biggest contributor to that gain will come from ``the massive 5.4 million ton increase in production currently projected for India,'' the ISO said.
This will be a reversal of what happened two years ago, when ``with a huge production shortfall India single-handedly pushed world sugar into a deficit,'' the report notes.
The global deficit in sugar supply in the 2005/06 crop year will shrink to 1.07 million tons, from 3.08 million tons a year earlier.
A ``tight balance'' between export availability, at 46.3 million tons, and import demand, at 45.9 million tons, may be upset by an increase in demand for Brazilian ethanol made from sugar cane, the ISO said.
``If our seemingly generous allowance for ethanol proves to be too conservative, the world sugar market may face a considerably tougher supply situation that currently expected,'' the report said.
The ISO forecasts total demand for Brazilian ethanol will reach 16.9 billion liters in 2005/06, compared with 16.1 billion liters in 2004/05.


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