In the noise of sugar, it is India versus the rest of the world's producers.

NEW DELHI: Sugar Prices have plummeted to the lowest in 11 months, challenging forecasts of a change in the global market to a deficit of a surplus. India, which is often a swing producer, is once again the center of attention as rivals criticize the export subsidies of the Asian nation.

The government’s policies on subsidies and export quotas spurred a challenge from other producers at the World Trade Organization. The escalating rift is said to be on Brazilian President Jair Bolsonaro’s agenda for a visit to India in November, the International Sugar Organization said in a report.

The dispute is also scheduled for traders and investors at the sixth annual Su0026P Global Platts conference that will begin on Sunday in Miami. Raw sugar futures fell 8.4% to 11.02 cents per pound in 2019, in the direction of a third consecutive annual decline. The bullish sentiment has been eroded by a series of exports from India that Brazil, the main producer, calls unsustainable.

“There’s plenty of worry for the market,” Michael McDougall, managing director at Paragon Global Markets in New York, said in a telephone interview. Sugar has been weak for two years, “which in general is not good for anybody,” he said.

Smaller producers such as Guatemala and El Salvador will continue to suffer, in part due to the volatility of the currency, said McDougall, who will attend the Platts conference.

Citigroup Inc described the policy of India as a blow to the bulls. While the country's domestic prices remain strong, establishing a viable export level of around 13 cents, heavy stocks and the slowdown in domestic consumption growth can reduce margins and stimulate cheaper offers for exports, he said. Aakash Doshi, a banking analyst, in a report this week.

Last month, Citigroup forecast a global balance toward a 7.2 million-ton bullish supply deficit in the 12 months beginning October 1, compared to a surplus this season. India, can produce 28 million tons, 15% less.

Hedge funds in the week ending September 3 boosted bearish bets by 10% to a record 189,100 futures and options contracts in raw sugar, as shown by the Commodity Futures Trading Commission data from the United States.

The turmoil in the currency markets, the prospects of a slowdown in world sugar demand and the US-China trade war will be hot topics in Miami, where more than 150 merchants and executives are expected.

Brazil’s real and India’s rupee have weakened against the dollar, boosting the appeal of exports priced in greenback. World sweetener consumption is expected to increase 1.3% next year, below historic trends, the London-based International Sugar Organization projects.

Producers can receive a boost for a global shift towards cane-based ethanol and increased demand in emerging markets. The increased use of cane juice for biofuels in India, Brazil and possibly China can reduce inventory, Bruno Lima, an analyst at INTL FCStone in Sao Paulo, said in a telephone interview.

Ethanol could be the saving grace for the sugar market, said Nick Gentile, managing partner of NickJen Capital Management in New York, in a telephone interview.

A trade agreement between Beijing and Washington can trigger a demonstration, although I don't think anyone believes we will have a resolution until after the election, Gentile said. No one believes in either side at this time.

In a September 5 report, ISO said: The basics provide some reasons for cautious optimism mainly because the surplus phase seems to be over. for the producers, the group said.

In India, exports can be unpredictable. Mills planned to ship 5 million tons in 2018-19, and the volume was 3.8 million at the end of August.

Indian sugar is there, but it's not really coming to the market, said Lima from FCStone. You have to wait and see.