SO, BACK TO SUGAR, WHERE DOES IT STAND IN ALL THESE “EXTRA” ISSUES? Well, we had a small surplus in 2022/23 and we are watching, closely the expected arrival of the Monsoon at Indian shores and see how it performs. Most of Indian crops are rain fed and if the rain is not good, well the crops will not be good. Cane is not the only one at risk, but also Rice, Cotton and Soybeans, to say the least.
It’s expected that until India shows what kind of cane and sugar production it will have, the Government may not allow any exports and therefore the world will need to replace their needs elsewhere. The focus will be even more on Brazil, Thailand and Australia, to a larger degree than before as they are the main sources of sugar exports.
Brazil Brazil is expected to have a larger cane crop i.e. 570 to 590 mln m/t vs. 548 mln m/t last year. Total sugar production is expected to rise to 37 to 39 mln m/t from 33.7 mln m/t. So, Brazil will contribute with 3.3/5.3 mln m/t more exports during 2023/24 crop year (April/March) which is good.
India Well, India exported 11.6 mln m/t during Oct21/Sept 22 and only 6 mln m/t during Oct22/May 23 with no more exports beyond that. Of course there will be some exports from coastal refineries, but they will need to import Raws to export Refined Sugars and that will need to come from somewhere, like Brazil!
Thailand We also have Thailand which had a better cane crop and higher sugar production during the last harvest. Overall exports during Dec22/Nov23 may rise by 1 mln m/t. The rainfall so far this year is about 5/10% lower and there is downside risk on the crop and low expectations that Thai millers may succeed to get farmers to divert back to sugar, especially the Northeast region which dropped 5% the past crop. The coming cane crop is estimated from 70 mln to 98 mln m/t vs 93.8 mln m/t during the past crop so it seems the downside remains higher than the upside, when it comes to exports from November 2023.
Australia Australian cane harvest which is due to start in June is expected to be similar in cane, but have a higher sugar content, although the overall performance may not be much different from the past crop. As Australia tends to export close to 3.2 mln m/t we can’t expect miracles from there.
20 | ADMISI - The Ghost In The Machine | Q2 Edition 2023
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