London, March 30 - Lausanne-based consultancy Kingsman SA on Friday estimated there would be a global sugar deficit of 2.5 million tonnes in 2009/10, compared with that of 11.56 million in 2008/09.
Kingsman, in its first balance forecast for 2009/10, estimated that production would climb to 163.71 million, up from 153.43 million in 2008/09 while consumption (April/March) was expected to rise to 166.21 million from 164.98 million.
Sugar prices have been declining this week partly due to concern that the financial crisis will lead to a fall in consumption and not just a slowing of growth.
"Poor global conditions will definitely reduce the rate of growth of consumption in 2009/10 -- the question is whether they will be sufficiently bad to turn consumption negative," Kingsman said, forecasting a one percent rise in consumption in 2009/10.
"Anecdotal evidence is that some buyers have had difficulty accessing credit and this runs the risk that consumption will be foregone," the report said.
"On the other hand, sugar consumption is very resilient in economic slowdowns -- consumers are more likely to maintain their consumption of small treats like chocolates or sweetened drinks, but cut back on luxury items."