The US Department of Agriculture expects China to produce 2022 million tons of sugar in the 2023/10 season. More sugar is also expected in other important sugar-producing regions. However, that has not yet had any effect on the listing. It continues to hold on to the price of crude oil.
From figures from Cosun Beet Company shows that all sugar beets have now been sown. The acreage for overseeding has now increased to about 2.600 hectares. That is the highest level since 2003; in that year, the acreage overseeded was 4.015 hectares. Frost was the cause of that. This year is crusting the main reason for overseeding. This concerns more than 64% of the acreage for overseeding. The problems are currently greatest on the northern clay soils, with 1.107 hectares. "And we expect that the area over-sown in the Netherlands will increase further in the coming dry period as a result of crust formation. But where irrigation is possible, over-sown beets are irrigated, which leads to a smooth emergence," says Cosun on its own website. .
Good expectations for next season
Looking at the situation for the upcoming season, the expectations for sugar production in the main producing regions are good to very good. So became two weeks ago already known that the production estimates for Brazil are oversized. The United States Department of Agriculture (USDA) expects the country to crush about 613 million tons of sugar cane into sugar, an increase of 6% compared to the current marketing year. This then results in a sugar production of 36,3 million tons, a plus of 3%. Production in South Africa also looks good with an increase of 13%.
It was announced this week that Chinese sugar production also looks promising. Figures indicate that the Asian superpower will produce about 10 million tons of sugar next season. That is an increase of 400.000 tons compared to the current season. The production of cane sugar is estimated at 8,7 million tons and the production of beet sugar will probably reach 900.000 tons next season. Domestic consumption is estimated at 15,8 million tons. This means that the country is not yet self-sufficient and therefore has to turn to the world market. In the longer term, this can have a price-increasing effect.
Listing still holds on to oil price
At the moment, however, the sugar quotation on the Intercontinental Exchange (ICE) is still firmly attached to the quotation for crude oil. That listing opened on Wednesday, May 11 at $104,49 a barrel. That is a slight increase compared to the day before. On May 10, oil closed at $101,63 a barrel. The still high oil price makes it more interesting for sugar cane processors in Brazil to use the raw material for the production of ethanol than for the production of sugar. And that is the reason that the sugar price does not (yet) deviate from the current level. On May 9, the price closed at €494,76 per tonne. At the beginning of this year, that was €438 per tonne and exactly one year ago, the quotation for sugar stood at €383 per tonne.
The fact that sugar is currently highly priced is also confirmed by the Food and Agriculture Organization of the United Nations (FAO) in the monthly sugar price index update. It rose by 3,3% to 121,8 points in April. This is more than 20% higher compared to the same period one year earlier. “High ethanol prices in Brazil and the continued strengthening of the Brazilian real (against the US dollar) supported sugar prices last month,” the organization added in a statement. The slow start of the harvest in Brazil in April also played a major role in sugar pricing.