Opinion

W5 Sugar Update: Global Sugar Deficit Foreseen in 2024, Impact on Middle East and Southern Mediterranean Countries

Sugar Beet
Brazil
Supply Chain Management
Sugarcane
Ukraine
Sustainability & Environmental Impact
Published Feb 9, 2024
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In W5 in the sugar landscape, the OIA predicts a global sugar deficit of 500 thousand mt in 2024, which is expected to impact the Middle East and southern Mediterranean countries significantly due to the ongoing Red Sea crisis. In addition, sugar production in Ukraine for the 2023/24 season is adequate to meet local consumption and export demand. Lastly, Brazil's sugar exports in Jan-24 reached 2.72 mmt with an export value of USD 1.45 billion, reflecting a YoY increase of 55% in daily export volume and over 20% in average export price.

Red Sea Crisis Fuels Global Sugar Deficit

The International Sugar Organization (OIA) forecasts a global sugar deficit of 500 thousand metric tons (mt) in 2024. Due to the ongoing Red Sea crisis, this shortage is expected to impact the Middle East and the Southern Mediterranean countries significantly. The OIA also noted that sugar consumption patterns have changed in recent years, with a decrease due to concerns about obesity, followed by an increase as sugar is now viewed as a nutritional ingredient that should be consumed in moderation. The OIA's estimate for global sugar production in the 2023/24 season is 179.9 million metric tons (mmt), reflecting a 0.87% year-on-year (YoY) surge. Within this, sugarcane is projected to contribute 141.9 mmt to the overall production, while sugar beet is expected to account for 38 mmt.

Ukraine's Sugar Production Surpasses Demand Despite Local Consumption

In 2023 and early 2024, Ukraine produced 1.8 mmt of sugar, with a wholesale price ranging from USD 0.60 to 0.62 per kilogram (kg) at the beginning of 2024. The First Deputy Minister of Ukraine reported an annual local consumption of about one mmt. As per the Memorandum of Understanding, the volume of exported sugar in the 2023/24 marketing year was capped at 650 thousand mt. Consequently, the sugar output in Ukraine is deemed sufficient to meet the domestic needs and fulfill the required export volumes.

Brazil's Jan-24 Sugar Exports Surge in Volume and Value

During the first three weeks of Jan-24, Brazil's sugar exports reached 2.72 mmt with an export value of USD 1.45 billion, according to the Secretariat of Foreign Trade (SECEX). Comparatively, in Jan-23, spanning 22 working days, the country shipped 2.03 mmt of sugar, generating revenue totaling USD 896.72 million. Notably, the country shipped over 530 thousand mt of sugar in W4 alone. The daily export volume in Jan-24 reached 143.3 thousand mt, reflecting a YoY increase of 55% compared to Jan-23's 92.07 thousand mt. Additionally, the average export price increased by over 20% YoY to USD 532.20/mt.

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