- Saturday, April 27, 2024
By: Shubham Ghosh
SUGAR prices have gone down by nearly $50 a tonne in international markets for the first time in two months and according to industry sources, this could impact India’s sugar sector.
On Thursday (24) last week, prices of refined sugar in the world market were $423 per tonne, while crude was trading at 17 cents a pound. On June 8, refined sugar cost $467 while crude sugar traded at 17.80 cents per pound.
According to sources in the industry, the sugar industry had predicted that production would fall in 2021 because of drought in Brazil, the world’s largest sugar-producing nation (in 2020-21, it produced 42.05 million metric tons). Sugar prices in international markets have been rising for the last few months as the demand for ethanol is expected to go up and Brazil’s shift towards more ethanol is also set to impact sugar production, the industry sources added.
“The supply of sugar from Brazil to the world market was declining due to the stagnant growth of sugarcane owing to lack of rains. But in the first week of June, Brazil received an average of 15-20 mm of rain. This saved the damaged sugarcane,” Abhijit Ghorpade, a sugar exporter, was quoted as saying by the Financial Express.
Has India come to the aid of the international sugar industry? Mukesh Kuvediya, general secretary of Bombay Sugar Merchants said the sugar season in India, the second largest producer (produced 33.76 million metric tonne in 2020-21), has just come to end and it produced more sugar this year. He said sugar export agreements are in full swing and prices in global markets have decreased in anticipation that surplus sugar from India is entering the world market.
Traders have predicted that with the possibility of rains, more than three million tonnes of sugar could enter the market. Kuvediya added that it would be tricky to predict the state of sugar in the international market till the sugar season reaches 70 per cent and the entire monsoon gets over.
Traders, however, said that although the sugar price has come down in the international market, it is expected to remain low only for a brief period.
