Between declining prices and excessive production in India, the second largest producer of sugar; is facing an extraordinary situation, as sugar mills are facing financial crisis due to the sharp dip in domestic as well as international markets, while demand remains stagnant.
At the same time the world’s largest producer of sugar, Brazil has recorded 4.15 million tons of sugar production while 4.81 billion liters of ethanol in the current season. Since 1st April till 15th May 2018 102.52 million tons of sugar was crushed, with average recovery of 128.26 kg/metric ton of sugar cane. Total 243 sugar mills are operating in this season. Agencies have predicted the decline in sugarcane production due to dry weather and ageing crop resulting in lower production of sugar in current season.
According to the survey there is decline of 2.85 % of sugar cane processing in current year.
The other major sugar production country in the world, USA is also expected to see decline in sugar production. The sugar production is expected to be at 8.15 million metric tons which is 3% less compared to the last year. One of the key reasons for decline in Sugar production is fall in sugar from beet, which is around 3.5% compared to the last year. The total sugar supply is expected to be at 12.936 million tons which is 2% less than last year. Still imports are going to witness a fall of 2% at around 3.05 million metric tons due to high tariff rate quota of last year.
Another leading sugar producing nation, Philippines has witnessed a sharp fall of 10.75% in raw sugar production compared to last year, which is around 1.93 million tons till the first week of May in the current season. While the refined sugar production has surged to 7.56 lakh tons, 3.21% higher than last year demand for refined sugar remained at 7.63 lakh tons, which 23.53% more compared to last year due to the sky rocketing sugar prices in domestic market. The Sugar Regulatory Authority has ordered to convert raw sugar into refined sugar to control domestic sugar price.
The other major sugar producing countries like Pakistan have some sweet news to share to the world. According to the sources from Ministry of Commerce, Pakistan will export 5000 tons of sugar to Nigeria. At the same time the country will witness sharp decline of 52% in sugar cane plantation. The domestic consumption will see rise of 5.2% due fall of prices.
Ukraine has registered the growth of 1.45% in sugar beet plantation at 2.80 lakh hectors. Another sugar producing country Mexico, the total sugar cane crushed is 91.47% producing 1.62 lakh tons of sugar till the mid of May, which 3.19% more compared to last year. The total sugar produced during the 2017-18 season is 5.711 million tons. The Indonesian Authorities permitted to import 6.35 lakh tons of raw sugar for the period of March-September 2018 and sold 1 million ton of refined sugar domestic consumption which was imported for food and beverages industry. While there is demand of 6.8 million tons of sugar per year, production has reached only 2.1 million tons per year.
Cuba has also witnessed the fury of nature and produced 1 million tons of sugar so far due to severe rainfall affecting the sugar cane production, and expects only 1.05 million tons sugar production due to extreme weather conditions.
African nation Nigeria will witness growth in domestic consumption and will import 1.8 million tons for 2018-19 season and it will produce 80,000 tons of sugar for the same period. Ivory coast has produced 1.90 lakh tons of sugar in current season.
While global sugar cane yield and sugar production will remain volatile, the European countries are no exception to the same. South trending prices and delay in sowing will impact the production for the season. Countries like France will witness decline in sugar beet plantation at 4.83% lakh hectors compared to 4.8.86% lakh hectors last year.
On the contrary Germany has witnessed growth of 3.7% in sugar beet plantation compared to last year. While preliminary estimation of Russia is expected to produce 6.1 million tons of sugar in current season. Total European sugar output is expected to fall in current season 20.174 million tons compared to 21.057 last year.
Currently International Sugar Futures London No.5 is trading at $355 & New York No.11 is trading as $12.79 whereas Indian Domestic Sugar prices are Rs.29400/MT to Rs.31650/MT (Including GST).