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Global sugar market grateful for India supply, once viewed as a threat

Image: A labourer carries a sack filled with sugar to load it onto a supply truck at a wholesale market in Kolkata, India, November 14, 2018. REUTERS/Rupak De Chowdhuri/File Photo/File Photo

SAO PAULO/NEW YORK, Oct 8 (Reuters) – India may be the only country able to fill a looming global supply gap for sugar as the Brazilian crop ends, making the world’s sugar market grateful for the Asian country that was once viewed as a threat to the market’s stability.

“Without India filling this gap, from November to March or
April, the global sugar market would have a serious problem,” said Paulo Roberto de Souza, the Chief Executive of Alvean Sugar SL, the world’s largest sugar trader.

India’s sugar policies, which include large subsidies, have been questioned for years at the World Trade Organization by competitors including Brazil and Australia.

In an interview, Souza said sugar buying is about to increase even as the drought-hit crop in top grower Brazil winds down and costs for the commodity, as well as for ocean freight, have increased sharply.

He said thatsugar consuming countries have been heavily reliant on available stocks during the year to avoid paying high shipping and sugar values, adding that those stocks are currently at critically low levels.

“Now they have no choice,” he said, expecting an increase on orders in the market that will have to be met by Indian producers, but at a higher price.

Sugar prices are near their highest since early 2017 mainly due to poor production in top grower Brazil following drought and frosts.

Alvean’s research department does not see much improvement in Brazil next season, expecting a cane crop of around 530 million tonnes and sugar production at around 32-32.5 million tonnes for the center-south region.

“The fields have suffered a lot and it seems we will have La Nina next year, which means less rain in the center-south,” Souza said.

Alvean projects the global supply deficit to nearly double in 2021/22 (Oct-Sept) from the previous year to up to 6 million tonnes, while it sees global sugar use growing 1.2% in 2021/22 from 0.7% in the previous season as countries further reopen after the pandemic.

Souza says sugar prices will have to increase further to attract enough Indian selling to fill the market’s gap.

He says Indian sugar export parity — the equivalent to domestic prices — is currently around 21 cents per pound, already above New York futures.

The above news was originally posted on www.reuters.com

Reporting by Roberto Samora and Marcelo Teixeira; Editing by Kirsten Donovan and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

Sugar Times Team
Sugar Times Teamhttps://www.sugartimes.co.in
The Sugar Times Editorial Team is a group of experienced journalists, analysts, and industry experts dedicated to providing in-depth coverage and insights on the global sugar industry. With years of experience in agriculture, trade, sustainability, and market trends, the team brings a wealth of knowledge and expertise to every article they produce.Focused on delivering accurate, timely, and relevant news, the Sugar Times Editorial Team aims to keep industry professionals, stakeholders, and enthusiasts informed on key developments in sugar production, trade policies, innovations, and sustainable practices. Their collective goal is to help readers navigate the complexities of the sugar sector and stay ahead of emerging trends shaping the future of the industry.You may submit your article on info@sugartimes.co.in if you have valuable contributions for the industry readers.
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