UPDATE 1-China's 2015/16 sugar output seen below 10.5 mln T, down y/y - Wilmar

jueves 23 de abril de 2015 06:44 GYT

* Sugar undervalued, does not reflect weather risk

* Brazilian millers under pressure from slump in sugar price (Adds weather risk, Brazil, comments)

By Colin Packham

SYDNEY, April 23 (Reuters) - China's sugar output in 2015/16 is expected to drop below the 10.5 million tonnes estimated for the current season, Wilmar International Ltd said, which could prompt buyers to ramp up imports of the sweetener to meet demand at home.

The country's sugar crop is likely to be a bit lower next year compared to what should have been an improvement from one year to another, Jean-Luc Bohbot, group head of sugar at Wilmar, told Reuters in an interview on Thursday.

If the world's top sugar importer buys more versus an estimated 4 million tonnes this season, it will give a much needed boost to sagging global benchmark prices, which according to Bohbot are currently undervalued.

Prices of the sweetener plumbed six-year lows last month amid ample world supplies, but Bohbot said he sees an upside from here given indications of inclement weather conditions.

The market has failed to take into account the threat from a possible emergence of a crop-damaging El Nino weather event and the potential for a Brazilian market collapse, Bohbot said. Brazil is the world's top sugar producer and exporter.

"Today people are putting zero risk factor on weather risk, despite some signs of strange weather in some parts of the world, and underestimating the Brazilian situation," he added.   Continuación...