In W22 in the sugar landscape, on Tuesday, May 30, sugar futures on the New York stock exchange were down 0.16% to 25.33 cents/lb, due to financial pressure on oil and the exchange rate, despite appreciating for most of the day following fears about global supply. Sugar futures continued depreciating on Wednesday, May 31, by 1.07% to 25.06 cents/lb, also representing a 5% MoM drop compared to 26.35 cents/lb on April 28, followed by data from Indian sugar exports which have shipped all 6.1MMT of sugar allowed for export amid high prices. However, India, the world's second-largest producer, is unlikely to allow additional exports due to uncertainty about the monsoon and an expected drop in production. Sugar futures fell by 0.72% to 24.88 cents/lb on June 1 and by 0.60% on Friday, June 2, to 24.73 cents/lb amidst positive expectations regarding the 2023/24 crop in the Center-South of Brazil, which should be the main guarantor of world sugar supply. In the Netherlands and Belgium, only 60% and 40% of the planned sugar beet areas were sown by the end of April, respectively. The sowing campaign has been delayed until May, with sowing rates lower than the average of the last few years. Furthermore, there are delays in sugar beet sowing in France, Germany, and Poland due to increased soil moisture and below-average temperatures. In May (22 working days), Brazil exported 2.471MMT of sugar and molasses for a total revenue of USD 240M. Sugar and molasses exports totaled 112.32K MT/day in the period, 57.6% YoY higher than 71.26K MT/day in 2022.
The Ukrainian Cabinet of Ministers has issued a temporary ban on sugar exports from June 5 to September 15, as the potential volume of exports has already been used by almost 100% for 2022/2023 MY. Additionally, sugar consumption is estimated to rise in Ukraine throughout the summer. This may lead to a shortage in Romania, the largest importer, accounting for 30% of the total volume of sugar imports in the EU. Ukrainian beet sugar production in 2022/23 was down 8% YoY to 1.33MMT, whereas the annual domestic consumption is estimated at 1MMT or less. In 2023/24 MY, the volume of sugar beet production is expected to reach 10.3MMT, up 13% from 9.1MMT in the current season due to a 21% increase in sugar beet acreage to 220K ha. Therefore, sugar production in Ukraine is forecast to increase by 13% to 1.5MMT. Meanwhile, sugar exports are projected at 250K MT, but rising global prices may stimulate Ukrainian exports in 2023/24 MY to compensate for losses from Russia's full-scale invasion and declining domestic demand. Khuzestan is the biggest producer of autumn sugar beet in Iran, and in the current crop year, more than 16K ha of the province were allocated for sugar beet, and a total of 600K MT of sugar beet from 9K ha, have already been harvested.
In order to stabilise sugar prices, the South Korean government decided on May 30 to eliminate the quota tariff rate on sugar until the end of the year. Due to low yields in top producers like India and Thailand, sugar prices have increased globally since 2022, reaching USD 699/MT at the end of May 2023. Lastly, the Nepal government has reduced the customs duty on sugar and jaggery from 40% to 30% starting in FY 2023/24. This paved the way for traders to import Indian sugar into the Nepali market at a cheaper price.
