Sugar exporters anticipate global sugar price hike
Indian sugar exporters are still waiting for the right period to enter further export deals.
Indian sugar traders are still waiting for international sugar prices to increase to enter further export deals, as per the trade body ISMA. Due to the drop in international raw sugar prices, not many export deals occurred in the last one month, further than the 38-40 lakh MTS of export agreements that have already been signed. Indian Sugar Mills Association (ISMA) also stated that, given that roughly 9 months are remaining for the present season, sugar traders are still waiting for the appropriate time to enter further trade contracts. During the October-November period of the current 2021-22 season, sugar exporters traded around 6.5 lakh MTS, higher than 3 lakh MTS in the year-ago period.
One of the sugar importing countries, Kenya has nearly exhausted its sugar import quota from the Common Market for Eastern and Southern Africa (Comesa) after ramping up imports to cover for a domestic production shortage. In October 2021, Kenya imported 201,530 MTS of sugar against the required 210,163 MTS, equivalent to 96% of the allotted quota as per The Sugar Directorate. Kenya has been struggling with a shortage of sugar supply caused by a disruption in production after breakdowns by some of the sugar millers in western Kenya.
European Union sugar production is set to bounce back in the marketing year 2021-22 (October 2021 to September 2022), as colder weather caused a lower incidence of virus yellows. S&P Global Platts Analytics assessed MY 2021-22 EU+UK sugar production at 17.495Mn MTS, increased from 15.565Mn MTS last MY. The increasing demand for Industrial ethanol, E10 as part of the energy transition with countries looking to fulfill their green plan is set to bolster ethanol requirement in the coming year. With sugar utilized as a feedstock for ethanol, this might increase trade requirements. The UK switched its standard gasoline requirement from E5 to E10, which can contain up to 10 percent ethanol. E10 was already in use in some parts of Europe, with France the highest European user of the fuel.