World sugar prices have reached a 12-year high, so Ukraine will increase exports

Global sugar prices continued to rise during the month, hitting 12-year highs on September 14 and 19 in New York and London amid forecasts of a cut in global sugar production.

The world’s largest sugar trader, Alvean, said on September 5 that it estimates a global sugar deficit of 5.4 million tonnes in 2023/24, the sixth consecutive year of deficit, as India may limit sugar exports and in Thailand farmers instead sugar cane is preferred to growing the more profitable cassava.

Over three months, New York March No. 11 (cane sugar) futures rose 17% to $27/lb or $595/t (+43% year-to-date), while December No. 5 sugar futures in London – by 10% to $725/t (+51% for the year).

However, against the background of the increase in sugar production in Brazil and the beginning of the season in the EU countries, a downward trend in world sugar prices has emerged.

According to the Unica group, in the south-central regions of Brazil, sugar production in the second half of September increased by 98% compared to the same period in 2022 to 3.364 million tons, and total production in the 2023/24 season increased by 23.8% to 32.615 million tons. t thanks to the increase in sugar cane processing by 49.54% compared to last year’s 45.46%.

Demand prices for Ukrainian sugar in May reached €700-720/t FCA plant, but the export ban stopped supplies for three months. Despite this, prices on the domestic market rose in September from 28-29 to 32-35 hryvnias/kg, although they have now fallen to 28-30 hryvnias/kg. In December, sugar exports reached 25,000 tons against the background of rising demand prices to €800/t FCA plant.

In general, in 2022/23 MY (October 22 – September 23), Ukraine exported 427 thousand tons of sugar, and in 2023/24 MY can increase exports to 600-650 thousand tons.

As of October 15, 4.6 million tons of sugar beets were collected from 96 thousand hectares or 39% of the area in Ukraine with an average yield of 47.7 tons/ha, and the total harvest may reach the highest since 2018, 11.8-12 million tons, of which 1.5-1.6 million tons of sugar will be produced.

Against the background of the high profitability of growing sugar beets in the range of $1-1.5 thousand from 1 ha (primarily due to high world prices), Ukrainian farmers increased the area sown under them from 184 thousand ha in 2022 to 250 thousand ha in 2023, because wheat cultivation became unprofitable due to low prices.

Tags: Brazil, EU, prices, sugar, India, USA, Ukraine