On Tuesday, sugar prices rose due to lower Indian outputs led by the shutdown of several mills amid limited available canes.
Sugar futures for May delivery increased by 0.29% to $24.51 a pound on April 18’s Asian afternoon session.
Indian mills produced an output of 31.10 million tons since the start of the current season on October 01. It plunged by 5.40% year-over-year.
Weaker volumes for the world’s top sweetener producer would barely leave a surplus for exports in the 2022/23 season.
According to the Indian Sugar Mills Association, of the 532 mills that began operations this season, 400 of them shut down. This included all factories from the primary producing state, Maharashtra.
They added that the state’s production dropped from 13.70 million tons last year to 10.50 million tons.
Based on experts, output plunges in Maharashtra dragged down the country’s overall production. As a result, it left no scope for more shipments.
Moreover, the government authorized the mills to deliver only 6.10 million tons of sugar for the 2022/23 season. Meanwhile, Prime Minister Narendra Modi’s administration was anticipated to permit another allotment of exports.
Additionally, India’s absence in markets could support global prices, which were almost at the highest level over a decade. Also, this could lead to increased shipments from rivals Brazil and Thailand.
Bumper Year Expected for Sugar
According to a chairman of canegrowers, 2023 is set to be a bumper year for the sugarcane industry in Queensland. It is led by a recent boost in global sugar prices.
In the past two years, the prices weakened below $400.00 per ton, not even covering the production costs of most growers. The figures doubled, reaching $804.00 a ton in mid-April.
They last witnessed an $800.00 high in 1980, making growers optimistic about the season.
Moreover, the plunge in fertilizer prices is another reason for growers to feel excited. It has skyrocketed recently since the Russia-Ukraine war, bringing down the positive effects of boosting sugar prices.
