Sugar prices recovery would only occur around 2020

The increasing production in India, Thailand and the European Union has led to an excess of sugar in the world market.

Sugar prices will only start to recover by 2020, as a global excess of stocks will continue to weigh, the chief executive of Alvean, the world's largest sugar trader, Gareth Griffiths said on Tuesday.

The increasing production in India, Thailand and the European Union has led to an excess of sugar in the world market. White sugar futures in the ICE fell to its weakest level in more than nine years on Tuesday, while raw sugar fell back to a flat in two and a half years.

Gareth Griffiths, who took over last year, calculated a global sugar surplus of 25 million tonnes for the combined 2017/18 and 2018/19 seasons.

"In the short term, prices should go down," Griffiths told Reuters at the Platts Kingsman sugar conference in Geneva.

"Prices are likely to begin to recover during the Brazilian agricultural year 2019-2020 or calendar year 2020. It is unlikely to happen before," added Griffiths, who estimated that European producers would export from 3 to 3.5 million tons. in the 2017-18 campaign.

Alvean is a joint venture that was formed in 2014 between the US agricultural group Cargill and the Brazilian Copersucar.

(With inputs from Reuters)