High world sugar prices will allow Ukraine to increase exports

Global prices for cane and refined (white) sugar are at their highest level in the last 4 years, as the harvest in Brazil declined due to prolonged droughts and frosts in July – August. According to experts, in 2021/22 mg, Sugar production in Brazil will decrease by 27% to a 10-year low of 28 million tons. in India, which is the world's second sugar producer, production in 2021/22 MG will remain at 31 million tons, which is slightly higher than the projected 30.9 million tons for 2020/21 MG.

The world Sugar Organization (ISO) predicts a global sugar deficit of 3.8 million tons for my 2021/22, which is 46% higher than the May forecast, where the deficit was estimated at 2.6 million tons.

It is expected that in the new season, which begins in October, global sugar production will increase by 0.2% to 170.6 million tons, while consumption – by 1.6% to 174.5 million tons.

October futures for both raw materials updated a 5-year high in August, but this week they fell under pressure from falling oil prices and in anticipation of beet sugar supplies from the new crop. White sugar futures on the ICE exchange have fallen by 0.8% to понеділка 483.3/ton since Monday, and cane sugar futures – by 2.6% to.433/ton, having risen in price by 8% and 10%, respectively, over the month.

Falling oil prices are putting pressure on ethanol prices, forcing Brazil's sugar factories to use most of the cane to produce sugar rather than ethanol.

According to the forecast of the Ministry of Economy, sugar production in Ukraine in 2021/22 MG will grow by 30% to 1.4 million tons, which against the background of high world prices will increase its exports. Taking into account the Rolling initial reserves of 422 thousand tons, the total supply of sugar will be 1.74 million tons, which will fully satisfy domestic demand, which is estimated at 1.25 million tons.

In my 2020/21, due to adverse weather conditions, Ukraine produced 1.1 million tons of sugar, which is 25% lower than in my 2019/20.

The Association "Ukrtsukor" believes that sugar prices, which amount to 25-27 UAH/kg (7 770-830/ton without VAT) and 80% higher than last year's level, may decrease in early autumn under the pressure of a good sugar beet harvest and following a drop in world prices. In my 2020/21, Ukraine reduced sugar exports by 20% compared to the previous season from 89 to 71 thousand tons. however, to activate exports, it is necessary that domestic sugar prices fall to the level of world sugar.