Market Briefing: Sugar – 06 June 2021

– India produced 208,000 tonnes of sugar in the second half of May
– Brazil exported 2,697,844 tonnes of sugar in May
– Ukraine proposes duty-free sugar import quota of 120,000 tonnes until October

Production

India’s sugar mills produced 208,000 tonnes of sugar, white value, in the second half of May, down from 445,000 in the first half and also below 473,000 tonnes in the same period a year ago, Indian Sugar Mills Association (ISMA) data showed. This brought total sugar production since the start of the 2020/21 season in October to 30.5 million tonnes, up sharply from 27 million produced in the same period a year ago. There were only 7 sugar mills (out of some 500) still in operation which compares with 18 at the same time last year.

Demand

The lowest price offered in the state-run Trading Corporation of Pakistan’s (TCP) international tender to buy 50,000 tonnes of white sugar, is reported to be USD533.90 per tonne c&f from Dubai-based Al Khaleej Sugar. Traders indicated that other offers submitted in the tender were USD564.90 by Sucden, USD550.00 by Louis Dreyfus and USD542.90 by Wilmar International. A series of import tenders have been issued by the TCP in recent months. In its last sugar tender reported on May 1, Pakistan bought 50,000 tonnes at an estimated USD447 per tonne c&f, although most tender participants had offered over USD550 per tonne c&f.

Ukraine has proposed a duty-free sugar import quota of 120,000 tonnes until October in order to stabilise the situation in the domestic market. The government approved the corresponding draft law at on June 2 which specifies that the import quota will be distributed among importers in the order of priority of filing applications with the customs authority. According to the ministry, the duty on the import of sugar into Ukraine is currently 50%.

Trade

Brazil exported 2,697,844 tonnes of sugar in May 2021, up from 2,583,479 tonnes in the same month last year, government data showed. Shipments were also up significantly from 1,903,597 tonnes in April, which had risen sharply from 1,514,757 tonnes in April 2020.

Price

Raw sugar futures in New York ended weaker on Thursday (June 3) as the market moved away from a one-month high of 17.93 cents hit in the previous session. A timely start of India’s four-month monsoon season and the pick-up in sugar production in Brazil’s Centre/South in the first half of May helped to pressure prices. The benchmark contract for July delivery ended down 25 points at 17.43 cents per pound, in dealings between 17.29 and 17.74 cents. Second-month October also shed 25 points to 17.48 cents per pound, while the back months ended with losses between 22 and 29 points. Trading volume fell to 105,915 contracts from 119,322 a day earlier.

(IHSmarkit)