The increase in the price of sugar to a 6-year high will contribute to the activation of exports from Ukraine

U.S. raw sugar prices rose to a 6-year high of $22.4/lb amid rising demand for biofuels and reduced sugar production.

The decision of the OPEC+ countries, in particular Saudi Arabia and the Russian Federation, to reduce oil production from May until the end of the year led to a sharp increase in quotations, which will stimulate sugar cane producers to sell the harvest not for processing into sugar, but for the production of biodiesel. In addition, Brazil's new government halted a program that exempted gasoline from taxation, so demand for ethanol from sugarcane has skyrocketed.

At the same time, unfavorable weather in India and Thailand worsens the outlook for sugar production.

Ukraine intensified its sugar exports against the background of rising world prices, and in March shipped 48,000 tons, while in general during the season (since the beginning of October) exports amounted to 262,000 tons. For comparison, in the first half of 2022, Ukraine exported 14,000 tons sugar

In 2022, 9.1 million tons of sugar beets were harvested in Ukraine with a yield of 50 t/ha (47 t/ha in 2021 and 41.6 t/ha in 2020) and 1.3 million tons of sugar were produced, with of which it was planned to export 800-900 thousand tons.

It is expected that the export of sugar will be quite active in the coming months, and it will be possible to ship 400-500 thousand tons by September.

In March, the average price of sugar in Ukraine remained at the level of previous months and amounted to $795/t, so it is quite attractive for Ukrainian producers.