On Dec. 23, ICE raw sugar futures hit a nearly six-year high of around 21 cents a pound. This price increase was attributed to expectations of strong demand and somewhat tight global supplies.
Brazil, the world’s top producer, said it would not reinstate federal taxes on gasoline, which would likely encourage the use of sugarcane instead of ethanol.
On the supply side, a decline in European sugar production and a postponement of the Thai sugar harvest have given bulls additional reason for confidence.
However, promising production prospects in major countries such as Brazil and India have hampered the medium to long-term prospects for the commodity.
World sugar production is expected to rise 5.5% between 2021 and 2022 to a new high of 182.1 MMT, according to a prediction made by the International Sugar Organization last year.
Indian sugar mills have exported 2.8 million tons of sweeteners this season, or 56% of the cumulative 5 million tons of indicative minimum export quota allowance for the season.
By September 2019, an additional 0.5 million tons of sugar can be exported. Thus, India’s sugar exports would need to reach their quota by around a third this year, according to Praful Vithalani, president of the All India Association of Sugar Merchants (AISTA).
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The government allocated a certain amount to each mill at the beginning of this season for sugar exports for the current season, along with incentives such as transportation subsidies and the ability to release an additional amount for the domestic market in addition to interest subsidies for Maintain buffer stocks. And other things. However, most sugar mills still need to meet their single capacity allowance due to factors beyond their control.
Compared to the previous season, the recovery of sugar in North India has been remarkably better. While still not as high as seen in North India, the recovery in sugar is better than in other regions of the country, including Maharashtra and Karnataka. As a result, less sugarcane is crushed this season than last.
The total remaining stock for the coming season should be 14.2 million tons. This is based on the opening balance of 10.7 million tons as of October 1, 2018, an estimated production of 33 million tons, domestic consumption of 26 million tons, and exports of 3.5 million tons.
