According to the Vietnam Commodity Exchange (MXV), closing the trading week of September 4 - 11, sugar price 11 continued to prosper with an increase of nearly 3% compared to the reference.
This is also the third consecutive week of increase for this commodity, bringing raw sugar contract prices in October to a historic high. The market continues to be concerned about low supply in Thailand and the possibility of banning sugar exports in India.
Sugar price movements last week
The El Nino weather phenomenon causes rainfall to be lower than normal in the main sugar producing areas of India and Thailand, the world's two leading sugar exporting countries. This is expected to cause production to decrease sharply compared to the previous crop year. Even low output shows the possibility that India will decide to ban sugar export factories starting from October to ensure domestic demand.
In the upcoming crop year, it is likely that India will not have enough sugar to allocate for export quotas. Currently, India only allows mills to export 6.1 million tons of sugar in the current crop year as of September 30.
In Thailand, according to Bloomberg, Mr. Rangsit Hiangrat, Director of the Thai Sugar Millers Corporation, said that output will decrease by 18% to about 9 million tons in the 2023/2024 crop year. . Extreme hot and dry weather is likely to get worse in the coming years.
Thailand is the world's number 2 sugar exporter, so the decline in this country's sugar output will put even more pressure on the global market.
Mr. Rangsit forecasts that the country's sugar exports will decrease to 6 million tons next year from 8 million tons this year. According to the Thai Ministry of Commerce, overseas sales in the first seven months of 2023 increased by 2.4% over the same period last year.
Sugarcane production in Thailand is expected to decline to 82 million tons in the 2023/2024 crop year from 93.9 million tons in the current crop year due to water shortages in key production areas.
Vietnam Sugarcane Association calls for sugar price stabilization
In Vietnam, according to data from the Vietnam Sugarcane Association (VSSA), in June, the Vietnamese sugar industry completed the 2022-2023 sugarcane crushing season. The accumulated output from the beginning of the season has been 9.7 million tons of sugar cane, producing 941,373 tons of sugar of all kinds. Comparing the same period with the 2021-2022 sugarcane crushing season, sugarcane crushing output reached 144% and sugar output reached 136%. This is also the second consecutive year of growth for the sugar industry.
To ensure sufficient demand, every year, the Ministry of Industry and Trade coordinates with the Ministry of Agriculture and Rural Development and the Ministry of Justice to review and grant quotas for sugar imports for domestic use in accordance with commitments. integration conclusion.
In addition, the Ministry of Industry and Trade regularly deploys market control solutions to minimize smuggled imports across the border. Therefore, this situation has decreased relatively sharply in recent times.
Vietnam's sugar industry is preparing for the 2023-2024 sugarcane production season. Therefore, a stable sugar market will be an important factor to ensure the output of the chain linking producers, sugar factories and consumers.
Therefore, the Vietnam Sugar Association is calling on sugarcane production businesses to join hands to stabilize the market by bringing sugar to the market according to demand and maintaining current sugar prices. In particular, the units do not let sugar prices increase to protect their own rights and that of consumers on the basis of harmonizing interests and absolutely do not commit or assist in acts of hoarding and pushing up prices.
In the long term, in order to build a healthy sugar market that develops harmoniously, ensuring the interests of producers, sugar factories, production units in the food industry and consumers, the authorities need to stabilize sugar prices at a reasonable level; Sugarcane purchasing prices ensure producers have income equivalent to or higher than competing local crops.
From there, people can feel secure in growing sugarcane, avoiding area reduction leading to sugarcane supply shortages, and ensuring raw material areas for sugar factories. On the other hand, it is necessary to strengthen links between farmers and farmers, between farmers and cooperative groups, cooperatives, and businesses; Forming concentrated production areas, using new sugarcane varieties, applying synchronous mechanization, advanced intensive farming measures to reduce costs, improve sugarcane growing efficiency and income for producers.
According to Industry and Trade Newspaper