Global sugar shortage anticipated despite increased production in Brazil, Russia, China

November 15, 2023
Thaiger |

A report by CovrigAnalytics released yesterday revealed an anticipated global sugar shortage.

The deficit is estimated to be 2.4 million metric tonnes in the 2023/24 crop year, marking an increase of 200,000 tonnes from previous expectations. Despite increased sugar production in Brazil, Russia, and China, the shortfall in output from India and Thailand, due to inadequate humidity, will not be compensated.

The report also highlighted a considerable reduction in China’s sugar demand by 440,000 tonnes. Nevertheless, the global sugar production for the 2023/24 crop year is projected to be 187.5 million tonnes, a decrease from the 189.4 million tonnes produced in the 2022/23 period. The anticipated annual sugar demand stands at 189.8 million tonnes, rising from 188.16 million tonnes in 2022/23. As a result, nations are poised to continue depleting the already low stock levels.

CovrigAnalytics’ report also noted that the NY11 sugar futures prices could remain in a trading range of two to three cents per pound up or down from the current levels. This is due to the supply and demand figures not indicating a significantly bullish or bearish market at present.

The report also indicated the ongoing difficulties faced by import-dependent countries in procuring sugar at the current high rates. Raw sugar futures reached a 12-year price peak at the ICE exchange last week, reported Bangkok Post.

“Africa is struggling to get hard currencies and pay the same amount of dollars for fewer volumes. China and South Korea might be switching more sugar to other sweeteners such as corn syrup.”

In related news, Thailand’s sugar exports, which sit second globally behind Brazil, are threatened with potential delays in the coming year. This comes after the Thai government implemented new controls to guard the domestic supply and curb smuggling.

The newly instated regulations require official approval for the export of any quantity exceeding one tonne, a move that some traders have voiced concerns could hamper delivery speed.