Global sugar market founds balance at a 500 euro/tonne level

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After a sharp increase in the month of March, the prices for white sugar on the world market are now stable at a level of around 500 euros per tonne.

At the raw materials fair in London, the price for white sugar rose from 440 to almost 515 euros per tonne around the end of March from mid-February. Meanwhile, the price seems to be balanced at a level of around 500 euros in the last week. The premium compared to raw sugar as compensation for processing costs is currently around 120 euros per tonne.

In the report following the monthly sugar consultations, the European Commission says it expects the sugar price to stabilize for the time being. Whether this is the case will depend on the extent to which India and Thailand can cope with the decline in production and exports of sugar from Brazil to the world market in the coming period.

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 tonnes of sugar have already been committed for export in advance, on the condition that prices remain at the same level.

Threats to supply on the sugar market are disappointing harvests. This applies, among other things, to Europe where arable farmers in various countries seem to choose to expand their grain area because of the favorable market perspective.

Furthermore, the high fuel prices worldwide have a strong influence on the sugar market. If prices remain at this level, then in countries like Brazil, for the time being, more bioethanol will be produced than sugar. Moreover, the European Commission expects little impact of the war in Ukraine on the European sugar market in the short term.

The International Sugar Organisation (ISO) has, with regard to the global sugar balance, slightly increased the expected deficit 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. The calculated final stock thus comes to 96.6 million tonnes.

For the coming season, the organization tentatively assumes a slightly lower deficit with 1.9 million tons. This expectation is based on a higher production of 170.5 million tonnes and also a higher consumption of 172.4 million tonnes. The final stock drops to a rounded 94.4 million tonnes. ISO expects the biggest drop in production in Brazil (-4.8 million tons). This is in contrast to larger production in Thailand (+ 2.4 million tonnes), the EU (+2.2 million tonnes) and Russia (+0.5 million tonnes).

The final production of the EU member states in season 2020-2021, according to the European Commission, amounted to 14.55 million tons of sugar. This production was realised in the EU on 1.4 million hectares and with an average yield of 10.4 tonnes of sugar per hectare.

For the 2021 harvest year, the commission estimates a production of 16.1 million tonnes of sugar on an area of 1.39 million hectares of sugar beet. An average of 11.6 tonnes of sugar yield per hectare is maintained.

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