Increase in Ukraine’s sugar production
Astarta (Kyiv), one of the largest sugar producers in Ukraine, increased its sugar production in the 2023 sugar season by 34%, or 95 thousand tonnes, compared to last year’s season, to 377 thousand tonnes.
In total, The holding’s five sugar factories processed 2.7 million tonnes of sugar beet grown on the holding’s and partner farmers’ fields, producing 377 thousand tonnes of sugar. The 130-day processing season of 2023 became the best in the last 5 years in terms of processed raw materials and produced sugar, the report said. As the Ukrainian News Agency reported earlier, Astarta’s net profit in January-September 2023 decreased by 10%, or 6.1 million euros, year-on-year to 55.967 million euros.
Brazilian sugar market
Sugar production in Brazil’s Central-South region rose 148.6% year-on-year to 48,000 tonnes in the first half of January and 25.5% year-on-year to 42,099 tonnes in the 2023/24 crop year to mid-January, Unica reported on Thursday. Meanwhile, more cane is being crushed for sugar production than ethanol, as 49.06% of cane was crushed for sugar production in the 2023/24 crop year to mid-January, compared with 45.95% last year.
Indian sugar production continues to decline
Declining sugar production in India is a bullish factor. The Indian Sugar Mills Association (ISMA) reported on Tuesday that India’s 2023/24 sugar production fell -5.3% year-on-year to 14.95 MMT in the 15 October-January period. According to the Indian Meteorological Department, this year’s monsoon rains (June-September) were 6% below average, the weakest monsoon in 5 years. For the full marketing year, ISMA forecasted India’s 2023/24 sugar production at 32.5 million tonnes, down -11.2% from 36.6 million tonnes in 2022/23. India extended sugar export restrictions from 31 October until further notice to ensure adequate domestic supply. India allowed mills to export only 6.1 million tonnes of sugar in the 2022/23 season until 30 September, after allowing them to export a record 11.1 million tonnes in the previous season. India is the world’s second-largest sugar producer.
Sugar prices are also being supported by signs that India’s ban on sugar exports will continue and that global supplies will remain tight after India announced a 50% export duty on molasses from its sugar refinery. This makes it less likely that India will lift its restrictions on sugar exports in the foreseeable future.
The impact of El Niño on sugar production
Thai Sugar Millers Corp predicted on 1 November that Thailand’s 2023/24 sugar production will fall by -36% year-on-year to a 17-year low of 7 MMT due to severe drought. Rainfall in Thailand so far this year is considerably lower than the same period last year, and the current El Nino weather system could further reduce rainfall over the next two years. Thailand is the world’s third-largest sugar producer and second-largest sugar exporter.
A favorable factor for sugar is the concern that El Nino weather conditions could disrupt global sugar production. The El Nino weather pattern often leads to heavy rains in Brazil and drought in India, adversely affecting sugar crop production. The last time El Nino brought drought to sugar crops in Asia was in 2015 and 2016, causing prices to rise.
USDA report
In its biennial report released on 23 November, USDA projected that global sugar production will increase by 4.7% y/y to 183,461 MMT and global 2023/24 human sugar consumption will increase by 1.2% y/y to a record 178,431 MMT. USDA also forecast 2023/24 global sugar ending stocks to fall 13.3% y/y to a 13-year low of 33,681 MMT. Meanwhile, on 10 August, ISO projected that 2023/24 global sugar production would fall 1.2% y/y to 174.8 MMT and the 2023/24 global sugar market would fall to a deficit of -2.12 MMT relative to 2022/23 global production, with a surplus of +852,000 MT of sugar.
Import/Export Statistics
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