Sugar trade across the globe
Datagro consultancy stated that Brazil's new sugar season will recover as rains return.
As per Datagro consultancy, Brazil's new sugar season that starts in March 2022 may possibly see an improvement from the current drought that damaged the crop as rains have returned to top sugar-producing areas in Central and South Regions of Brazil. Datagro estimates a sugarcane crop output of between 530 and 565 Mn MTS in the center-south next season, increased from 518 Mn MTS currently. Sugar production is estimated between 31.6 and 33.7 Mn MTS against 31.9 Mn MTS this year. Sugar enterprises are expected to increase crop care as the rains improve soil moisture and cane development conditions, as per Datagro analyst Plinio Nastari. He also added that despite the inadequate crop this year, sugar mills managed to reach above average profitability as prices for both sugar and ethanol remain near multi-year highs. He foresees challenges, however, such as high prices for crop care products as well as reduced accessibility of heavy machinery.
Sugar exports from India may face challenges in the 2021-22 season even despite the fact that 1.8 Mn MTS had already been contracted at the beginning of the season itself. As per the Secretary for Food and Public Distribution, Sudhanshu Pandey. Addressing the All-India Sugar Traders Association (AISTA) on global sugar trade, he said that last year India was able to export 7.2 Mn MTS of the sweetener to several destinations and nearly 50% of this went to three sugar importing countries — Indonesia, Afghanistan, and Sri Lanka. Pandey said that these sugar importing countries have different dynamics this year. Thailand’s production is expected to increase this time and so Thailand sugar will try to find a possibility to trade with Indonesia. Indian sugar will have to compete in the Indonesian market again. Instability in Afghanistan may affect India’s sugar exports to the country and Sri Lanka has a massive foreign currency shortage. And therefore, a new plan will have to be thought of by the industry so that the export trade market is also served. Pandey said that India is planning to divert about 3.5 Mn MTS for ethanol production in 2022 and by 2023, the goal is that at least 6 Mn MTS of sugar should be diverted for ethanol production. But at the same time, India is also considering new market opportunities for sugar export.