The International Sugar Organisation (ISO) has said that there is a possibility of a slight world sugar deficit in 2003/04 while prices are likely to remain largely at current levels.

“There is a possibility that the situation on the world sugar market will get worse next year. So there is a possibility of a world sugar deficit, but a very tiny possibility,” Sergei Gudoshnikov, the ISO’s chief economist, told Reuters.

“There are no concrete data at this point showing that the situation is going to reach earth-shattering proportions.

“Preconditions are such that sugar prices are not likely to rise drastically,” Gudoshnikov added. “I personally think prices are most likely to stay within their current range.”

Brazil, the world’s largest sugar grower and exporter, will be influential in the global sugar market, with some industry players concerned that the country’s sugar production and exports could fall because of the higher use of cane for ethanol production.

“A small shortage would be quite possible if Brazilian producers stick to their plans,” Gudoshnikov said, adding that the global supply-demand picture was dominated by “fragile optimism”.

Brazilian producers said earlier in the year that they would begin harvesting sugar cane early in order to prevent ethanol shortages.

“But if this does not happen, the world market will be awash with Brazilian sugar again,” Gudoshnikov said.