Export at full speed
Sugar market is packed after mega harvest
The 21 sugar-producing European member states expect a top harvest for the 2017/2018 season. This is also the case elsewhere in the world. This means that the global sugar market is overflowing with stocks, which has a depressing effect on prices.
The European Commission (EC) expects a production of 2017 million tons of sugar for the 2018/20,57 season, of which 900.000 tons is isoglucose. This is evident from notes from the sugar expert meeting in Brussels, held on 25 January. From the previous season, 1,45 million tons of outside quota sugar is carried over to this season, bringing the total availability to 22,03 million tons. The final sugar production is determined in March.
90
million tons
Rising world production
The International Sugar Organization (ISO) in London expects a world production of 2017 million tons for the 2018/179,4 season. Consumption is estimated to be lower, increasing the stock to 90 million tons (worldwide). Market bureau FO Licht estimates the production surplus to be slightly lower. Last season, world sugar production amounted to 169 million tons.
European situation
France is by far the largest European sugar producer this season. This concerns an estimated production of 5,95 million tons. In addition, the country also has the largest transfer of outside quota sugar. Total availability amounts to 6,3 million tons. Germany is in second place with 5,2 million tons and Poland in third place with 2 million tons.
The Netherlands arrives at an estimated production of 1,29 million tons of sugar and 27.500 tons of transfer. The total decision is therefore 1,31 million tons for the 2017/2018 marketing season. This puts it in fifth place, after the United Kingdom.
More exports
The EC expects 2017 million tons of sugar to be imported by the European Union (EU) during the 2018/1,3 season, a decrease of 1,18 million tons compared to 2016/2017. This is partly the result of a lower consumption level. However, more sugar is processed into ethanol.
The export level is estimated at 3,2 million tons, an increase of 1,81 million tons. The positive trade agreements for the export of sugar in processed form have increased the volume to be exported for this product group to 1,6 million tons. During the 2016/2017 season, the EU exported 1,3 million tons. This is the maximum WTO limit.
It amounts to a monthly average of 108.333 tons. Customs data shows that the level of exports was significantly higher between October 2017 and 20 January 2018, with an average of 325.000 tons. Not all export declarations have been processed yet, which means that these figures can still be adjusted upwards.
Price pressure
The increased exports come with a price. There has been enormous pressure on prices on the world market. Last November, the average selling price was €410 per tonne, a decrease of €12 in 1 month. Over the same period, white sugar quoted on the London futures market was €318 per tonne, a decrease of almost €30. The May contract had to surrender €26 per tonne. The New York raw sugar contract is experiencing similar losses.
Niels van der Boom
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