In the meantime, slightly more than half of the total sugar beet acreage has been sown and the first sown beets are already emerging. However, on the world sugar market, sowing is currently not the most important theme in price formation.
The percentage of sown sugar beets, according to Cosun figures, is 27% as of Sunday, March 50,7. This means that just over half of the national area has now been sown. The Zeeland Islands and Zeeland Flanders are clearly in the lead, with 75,4% and 71% respectively. The Noordoostpolder follows with 68%. "We are not disappointed with the quality of the seedbed, but often several passes are needed to get a sufficiently fine seedbed," says Cosun on its own website. "We do point out that there is a risk of drift damage, as a result of persistently dry weather."
Export restriction in India
The main issue on the world sugar market is the export restriction that India may want to introduce to control domestic prices. An official announcement is expected early next month, insiders report Reuters. This would probably involve an export restriction of up to 8 million tons. According to various dealers, an export contract has already been concluded with factories for 7 million tons. This means that an export restriction of up to 8 million tons could result in an export ban from the beginning of May (until the end of September). That calculation resulted in a significant sugar price increase on Friday, March 25. The Liffe quotation closed at €511 per tonne, the highest level more than five years.
ING did qualify the situation by stating that the export restriction is higher than the export figure that the government takes into account. The Indian government itself assumes that exports this marketing year will amount to 7,5 million tons. That means there is still 500.000 tons of slack. At the same time, there are also rumors that the restriction is already in doubt, because production may be even higher than previously expected: 34 million tons instead of 31 million tons. Moreover, domestic prices have already fallen last week. This bearish factors pushed the sugar price down again on Monday, March 28, to €505 per tonne.
War has an effect
Moreover, it is not only the possible export restriction that is a price-determining factor. High oil prices and lower production in Brazil also still play a major role. The higher oil prices, the more factories choose to produce sugar cane-based ethanol. This had an upward effect on prices in recent weeks. However, the successful talks between Ukraine and Russia have pushed oil prices down to $109 per barrel on Monday, March 28. This in turn encourages sugar cane factories in Brazil to produce sweetener, instead of ethanol.