The global sugar market is currently experiencing significant fluctuations, with prices reaching a 12-year high due to various factors including adverse weather conditions in major producing countries like India and Thailand, as well as rising energy and transportation costs. The United Nations Food and Agriculture Organization has projected a 2% decline in global sugar production compared to the previous year, leading to concerns about supply shortages in import-dependent nations such as Nigeria, which relies on foreign sugar for 98% of its needs. India’s sugar production is expected to drop by 8% this year, while Thailand is also facing reduced sugarcane yields. In contrast, Brazil anticipates a 20% increase in its sugar harvest, but this boost will not impact global supplies until March 2024. [1b3cf30c]
In the Philippines, the Sugar Regulatory Administration (SRA) has approved the importation of 240,000 metric tons (MT) of refined sugar to stabilize supply during the milling offseason, particularly after El Niño conditions severely impacted local sugarcane production. The SRA indicated that this import program would help traders recover costs and potentially earn a small profit after incurring losses from shipping raw sugar to the United States. Traders reported a loss of P900 per bag, having purchased raw sugar at P2,700 and sold it at P1,800. Approximately 176,000 MT of the imported sugar is specifically aimed at addressing supply gaps during this period. [acf72eb1]
The Philippines is also under pressure to fulfill its US sugar quota of 25,300 MT by September 30, with shipments expected to take about 15 days to load and 30 days to reach the US. Bacolod City has eased truck bans to facilitate the loading of sugar cargo, reflecting the urgency of the situation. [acf72eb1]
Meanwhile, in Vietnam, major sugar producers are reporting increased revenues and profits, with Thanh Thanh Cong-Bien Hoa JSC seeing a nearly 20% rise in revenue in the first three quarters of 2023. The rising demand for sugar in Vietnam is expected to continue, contributing to the overall increase in sugar prices. [1b3cf30c]
In the United States, Senator Jeanne Shaheen has called for reforms in the sugar supply chain to address inefficiencies and reduce costs for consumers. The Government Accountability Office estimates that the current sugar program costs American consumers between $2.5 billion and $3.5 billion annually. The American Sugar Alliance, representing beet and cane growers, asserts that there is no actual shortage of sugar in the US, with the USDA reporting a plentiful supply for the 2023/24 season. [0d5d6a2f][11b0672e]
In India, sugar consumption is projected to rise to a record 29 million metric tons this year, driven by increased demand for ice cream and soft drinks during heat waves and election rallies. This surge in consumption is expected to temporarily lift local prices, benefiting producers like Balrampur Chini and Bajaj Hindusthan. [aefb3670]
As the global sugar market continues to evolve, the interplay of local production challenges, import strategies, and international trade dynamics will be crucial for stakeholders across the industry. [b640c8bc]