Bank predicts weak Australian sugar production for 2011-12
The National Australian Bank (NAB) today predicted Australian sugar production levels for 2011-12 will be between 3.8 and 3.9 million tonnes. According to the NAB, this amount is not as high as Australian sugar producers will have hoped.
The news coincides with a current surge in Chinese investor interest targeting Australia’s lucrative sugar industry, recently reported by Australian Food News.
NAB Agribusiness Economist Michael Creed said, “In Australia it has been a very difficult season for producers and mills due to the sugar crop being inconsistent across regions.
“Overall, global production is expected to exceed usage, creating a surplus of 4.3 million tones according to recent ISO numbers. This does point to weaker season average prices. Helping to offset this pressure will be Chinese demand, where domestic prices remain very high.”
However, in July 2011, Australian Food News reported on lower sugar production rates expected in Brazil over the coming year, influencing a rise in global sugar prices.
Chance of La Niňa returning in 2011
According to the Australian Bureau of Meteorology (ABM), the outlook for the October to December period points to a wetter than normal season across northern Australia and western WA and a drier than normal season across Tasmania and southern Victoria. The ABM’s forecast shows conditions in the Pacific are pointing to a La Niňa event returning during the final quarter of 2011. If one does form, current indicators suggest it will be weaker than the 2010-11 La Niňa, which caused huge floods across Australia’s eastern seaboard and hinterlands in early 2011.