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LONDON. — Platts Kingsman extended the round of upgrades by commentators to forecasts for the world sugar production deficit next season, amid waning expectations for Brazil’s cane crop. Platts raised by 570 000 tonnes to 6,45 million tonnes its forecast for the world sugar production deficit, the extent to which output outstrips supply, over the 2016-17 season, starting next month.Then 2015-16 deficit was seen at 5,21 million tonnes, up some 200 000 tonnes from Platt’s previous forecast. Platts is the latest analyst to up its idea of next season’s sugar deficit.

Earlier this month Rabobank lifted its forecast for the sugar deficit in the 2016-17 crop year to 7,90 million tonne, a 5,90 million tonne upgrade.

And the International Sugar Organisation, in its first forecast for the 2016-17 season, forecast a 2016-17 global sugar deficit of 7,05 million tonnes.

A key factor in these upward revisions of the deficit is cooling expectations for Brazilian production.

This month Unica, the Brazilian cane industry body, issued a downbeat outlook for the rest of the year.

Brazil’s cane belt saw near ideal conditions over the first half of the local cane cutting season, which officially begins in April.

Last year’s heavy rains meant there was plenty of cane left in the fields, and good growth of new cane, while dry weather from the start of the year allowed fieldwork to proceed rapidly.

The drier weather also meant more recoverable sugar, and favoured sugar over ethanol production.

But after months of low rainfall analysts are now suggesting that the season could come to an early end.

Still, this might not slow the pace of sugar output.

This month Rabobank suggested that even if the volume of cane is reduced, producers might just divert even more to sugar production, compared to ethanol, keeping output of the sweetener steady.

And Marex Spectron noted that analysts are starting to agree that production will actually edge up in the following marketing year.

In a briefing, the broker suggested that production will be supported by “high prices which will cause more planted area, more husbandry, and a higher sugar mix, outweigh the negative effect of years of low renovation”.

And sugar prices on Monday came under pressure from the news that as of September 20, speculators held a record-large number of bullish positions in raw sugar futures, according to the latest US regulatory data.

This is no surprise, but underlines the extent to which speculative buying has been driving the sugar market, and the risk that support could ebb rapidly away if the hedge funds change their minds. — Agromoney.