Sao Paulo/New York India may be the only country capable of filling an emerging global supply gap Sugar As Brazil’s harvest ends, the world’s sugar market thanks to the Asian country once seen as a threat to market stability.
“Without India filling this gap, from November to March or April, there will be a serious problem in the global sugar market,” said Paulo Roberto De Souza, chief executive of Alven Sugar SL, the world’s largest sugar trader.
India’s Chinese policies, which include large subsidies, have been questioned by competitors in the WTO over the years, including Brazil and Australia.
In an interview, Souza said that sugar purchases are set to increase, even as the drought-hit crop in top producer Brazil has declined and the commodity as well as sea freight costs have risen sharply.
He said sugar consuming countries have relied heavily on available stocks during the year to avoid paying high shipping and sugar prices, adding that those stocks are currently at critically low levels.
“Now they have no choice,” he said, hoping for an increase in orders in the market, which will have to be met by Indian producers, but at a higher price.
Sugar prices are near their highest level since early 2017 due to poor production in Brazil, the top producer after drought and frost.
Alvín’s research department doesn’t see much improvement in Brazil next season, with the center-south region expected to harvest about 530 million tonnes of sugarcane and about 32–32.5 million tonnes of sugar.
“There has been a lot of damage to the fields and it looks like we will have a La Nia next year, which means less rain in the centre-south,” Souza said.
Elven forecasts the global supply deficit to nearly double to 6 million tonnes in 2021/22 (October-September) from the previous year, while global sugar use is expected to grow by 1.2% in 2021/22, up from 0.7 in the previous season. % Was. Countries reopened after the pandemic.
Souza says that sugar prices will have to be increased further to attract enough Indian sales to fill the market gap.
He says Indian sugar export parity – at par with domestic prices – is currently around 21 cents a pound, already well above New York futures.[SOF/L]
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