The United States, the Netherlands, India and Russia. They all released positive figures about the sugar market this week. These positive expectations and results somewhat moderate the current price increase in sugar, caused by the high quotation of Brent oil. The Chinese production decline is still a point of concern.
Cosun Beet Company has concluded the 2021 beet campaign. With an average of more than 56.000 tons of beets per day, it was a good campaign. "It is the first time that the average processing capacity has exceeded 56.000 tons," writes the organisation. Nationally, the carrot yield has reached 82,2 tons per hectare, with 16,7% sugar. This means that the sugar content is 0,6% above the level of last season. The recoverability averages 90,7 and the tare percentage is 10,7%. If seed orders are taken into account, the area of sugar beet will increase by 1,5% in the coming campaign to around 84.000 hectares.
Also growth abroad
Not only did the campaign end with a positive result in the Netherlands, Rusagro – one of the largest agricultural companies in Russia – also reported an increase in production. The season ran from September 1 to January 16 and during that period 4,85 million tons of sugar beets were processed, with an average sugar content of 19%. The sugar factories of rusagro were in operation for 130 days and a total of 754.000 tons of sugar were produced. That is an increase of 21% compared to the previous season. The sugar stock for the end of the year is expected to be 466.000 tons. According to Souzrossakhar, as of January 10, Russia had already processed 37 million tons of sugar beets and produced 5,3 million tons of sugar.
The Indian Sugar Mill Association also released new figures on sugar production this week. In the period from October 1 to January 15, Indian sugar mills produced 15,1 million tons of sugar. This means that production in the second largest sugar producer in the world is approximately 6% ahead of the same period a year earlier. Exports amounted to 1,7% million tons from October to the end of the year. That is a fourfold increase in the total export volume of a year earlier. Analysts expect Indian exports for January to be around 700.000 tonnes.
The United States also communicates positive figures regarding sugar production. For the 2020/2021 season, domestic sugar production is reported to reach a record 9,39 million tonnes. That is an increase of 1,6% compared to the December forecast and 160.000 tons more than a season earlier. The production of beet sugar amounts to 5,4 million tons, which is 6% more than last season. The total sugar stock therefore rises to 14,1 million tons, an increase of 0,5% compared to the previous season. The ending stock is reported to be 1,77 million tonnes. That is 4% more than last season.
Moderating price increases
The positive yield figures above temper the price increase currently underway on the sugar market. The Liffe quotation closed on Monday 17 January at €445 per tonne. One week ago that was €424 per tonne. The rising price for Brent oil - to a seven-year high of $88,64 per barrel on Tuesday, January 18 - underlies the higher sugar price. High oil prices often lead to an increase in ethanol production at the expense of sugar production. With higher yields worldwide, the loss in the ethanol industry can still be somewhat compensated, according to insiders.
The Chinese sugar market is still a point of uncertainty for sugar quotations. Analysts from market agency Green Pool have lowered expectations for Chinese sugar production to 9,95 million tons. Previously, 10,1 million tons were calculated. It is not often that Chinese sugar production falls below 10 million tons. There is mainly less beet sugar available, according to insiders. There is less of a shortage of cane sugar, which is frequently used for the production of ethanol.