The world's top two sugar producers, Brazil and India, will add more than 10 million tonnes to global production by 2020, in a drive to keep pace with rising demand in Asia, a senior economist said.
"Income growth is the key driver of consumption growth in Asia," Leonardo Bichara Rocha of the International Sugar Organization (ISO), told a conference on the Brazilian sugar and ethanol sectors organised by Sao Paulo-based consultancy Datagro.
Brazil, the world's top producer and exporter, will add around 8 million tonnes of production taking it to 46 million tonnes while India, now the world's number 2 sugar producer and number one consumer, will add 2.5 million tonnes to take its output to 30 million tonnes by 2020.
Remaining origins could add some 17.5 million tonnes of production by 2020.
"Demand will be 'pulling' supply up in the current decade," Plinio Nastari, president of Datagro, told the conference.
"Future expansion (in supply) will happen as a result of productivity increases."
Brazil was expected to remain a highly competitive sugar origin because of its advantage of having huge scale of production, delegates said.
The country has boosted its competitiveness on the world sugar market, benefiting from a weakening of its currency, the real, against the U.S. dollar this year.
Bichara Rocha told the conference that he expected Brazilian sugar exports to stand at 25.5 million tonnes in 2012, compared with 25.6 million tonnes in 2011, and 28 million tonnes in 2010.
He said he anticipated that Brazilian sugar production would stand at 38.5 million tonnes in 2012, compared with 36.0 million tonnes in 2011, and 39.0 million tonnes in 2010.
Harvesting in the centre-south of Brazil, the main growing region, has been delayed by heavy rainfall, raising questions over whether mills can catch up on crushing later in the year.
It is more remunerative presently for Brazilian mills to crush sugar than ethanol biofuel from cane, Nastari said.
The Far East and Indian Sub Continent were expected to account for almost half of world sugar consumption by 2020, up from around 40 percent today and around 25 percent in the mid-1980s, Bichara Rocha said.
A report earlier this year by the Commonwealth Bank of Australia said China is likely to become the world's largest sugar importer by 2020 as consumption keeps pace with rising incomes.
Source: Reuters