After a sharp increase in March, the prices for white sugar on the world market are now stable at a level of about 500 euros per tonne.
On the commodities exchange in London, the price for white sugar rose from 440 to almost 515 euros per ton from mid-February around the end of March. In the meantime, the price seems to be in balance at a level of about 500 euros in the last week. The premium compared to raw sugar as compensation for processing costs is currently approximately EUR 120 per tonne.
In the report after the monthly sugar consultations, the European Commission says it expects the sugar price to stabilize for the time being. Whether that is the case, according to the committee, will depend on the extent to which India and Thailand can absorb the decline in the production and export of sugar from Brazil on the world market in the coming period.
Record production in India
India expects a record production of about 26 million tons of sugar this year, which is more than 4 million tons more than last year. Of this production, 6 million tons of sugar has already been secured for export, on the condition that prices remain stable.
Threats to supply on the sugar market are disappointing harvests. This applies to Europe, for example, where arable farmers in various countries seem to be opting to expand their grain acreage because of the favorable market prospects.
Furthermore, the high fuel prices worldwide have a strong influence on the sugar market. If prices remain at this level, countries like Brazil will produce more bioethanol than sugar for the time being. Incidentally, the European Commission expects little impact of the war in Ukraine on the European sugar market in the short term.
Global sugar balance
With regard to the global sugar balance, the International Sugar Organization (ISO) has slightly increased the expected shortage for the 2020-2021 season to almost 2.3 million tons. The total production of last year is now estimated at 169 million tons with a consumption of 171.3 million tons. This brings the calculated closing stock to 96.6 million tons.
For the coming season, the organization is provisionally assuming a slightly lower deficit of 1.9 million tons. This expectation is based on a higher production of 170.5 million tons and also a higher consumption of 172.4 million tons. The closing stock falls to a rounded 94.4 million tons. ISO expects the largest production decrease in Brazil (-4.8 million tons). This is offset by larger productions in Thailand (+2.4 million tons), the EU (+2.2 million tons) and Russia (+0.5 million tons).
European production on the rise
The final production of the EU Member States in the 2020-2021 season has amounted to 14.55 million tons of sugar, according to the European Commission. This production was realized in the EU on 1.4 million hectares and with an average yield of 10.4 tons of sugar per hectare.
For the 2021 harvest year, based on estimates, the Committee assumes a production of 16.1 million tons of sugar on an acreage of 1.39 million hectares of sugar beet. An average of 11.6 tons of sugar yield per hectare is maintained.