Published on : 14/09/2022 – 00:10
The world sugar market is resisting the war in Ukraine which has swept away the price of many raw materials.
Brazil is the world’s largest exporter and it is thanks to it that sugar prices have fallen slightly, even if they remain firm. The explanation comes from the price of oil: faced with the price of crude which has fallen and inflation in the country, the giant Petrobras has lowered the price of gasoline. That of ethanol automatically followed the same slope. And cane processors earn less today by allocating their sugar cane field to the manufacture of biofuel. We see it in the second part of the campaign, which began in April: the Brazilians have limited the ethanol outlet to favor the production of sugar. And this is what has made it possible to maintain in recent months a level of export sugar supply sufficient to meet demand.
The cane surfaces have however decreased in the country, but ” what was lost in cane was gained in volume of sugar summarizes Timothé Masson, Secretary General of the World Association of Sugar Beet and Cane Growers. ” Brazil remains the stabilizing factor of the market “, explains the expert, even if India has just stolen its place as the leading sugar producer. India produces mainly for its domestic consumption and exports little, so it also has little influence on world sugar prices. The growing Indian Ethanol program is also helping to reduce Indian sugar export volumes.
Europe will have to pay more to refine and import
On the other hand, the good performance of the world market, fueled by a recovery in consumption in recent months, amplifies the tension on the European market caught up in the turmoil linked to the war in Ukraine: European prices are soaring on the spot market, i.e. for immediate deliveries. In question, gas prices and fears of refineries running out of gas.
These prices are still weighing heavily on fertilizer prices. However, beet, which is very intensive in inputs, could therefore see its surfaces decrease in favor of less demanding crops, a prospect which is fueling the increase. And that adds to the drop in production in Europe. Europeans will have to import more this winter.
But at the price of 750 euros per tonne, imported and refined sugar risks being expensive for European industrial buyers. Last May, for the same quantity, they paid 300 euros less.