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Tuesday, October 26, 2021

India Could Be The Solely Nation To Fill A Looming International Provide Hole For Sugar: Report

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India’s sugar insurance policies – embody massive subsidies

India often is the solely nation capable of fill a looming world provide hole for sugar because the Brazilian crop ends, making the world’s sugar market grateful for the Asian nation that was as soon as seen as a menace to the market’s stability.

“With out India filling this hole, from November to March or April, the worldwide sugar market would have a major problem,” stated Paulo Roberto de Souza, the Chief Government of Alvean Sugar SL, the world’s largest sugar dealer.

India’s sugar insurance policies, which embody massive subsidies, have been questioned for years on the World Commerce Group by rivals together with Brazil and Australia.

In an interview, Souza stated sugar shopping for is about to extend even because the drought-hit crop in prime grower Brazil winds down and prices for the commodity, in addition to for ocean freight, have elevated sharply.

He stated that sugar consuming nations have been closely reliant on accessible shares through the yr to keep away from paying excessive delivery and sugar values, including that these shares are at the moment at critically low ranges.

“Now they don’t have any alternative,” he stated, anticipating a rise on orders available in the market that must be met by Indian producers, however at a better value.

Sugar costs are close to their highest since early 2017 primarily resulting from poor manufacturing in prime grower Brazil following drought and frosts.

Alvean’s analysis division doesn’t see a lot enchancment in Brazil subsequent season, anticipating a cane crop of round 530 million tonnes and sugar manufacturing at round 32-32.5 million tonnes for the center-south area.

“The fields have suffered so much and it appears we can have La Nina subsequent yr, which implies much less rain within the center-south,” Souza stated.

Alvean tasks the worldwide provide deficit to almost double in 2021/22 (Oct-Sept) from the earlier yr to as much as 6 million tonnes, whereas it sees world sugar use rising 1.2 per cent in 2021/22 from 0.7 per cent within the earlier season as nations additional reopen after the pandemic.

Souza says sugar costs must improve additional to draw sufficient Indian promoting to fill the market’s hole.

He says Indian sugar export parity — the equal to home costs — is at the moment round 21 cents per pound, already above New York futures.

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