World Sugar Demand & Supply

Latest estimates by some of Sugar Industries leading trade house and analysts...

source: www.sugaronline.com

Sugar 2009... the year so far

Sugar prices in India, the largest sugar producer after Brazil, have risen dramatically this season, starting October, due to then projected 32 % decline in the output to 18 million tones, which now is projected to be around 16 mmt. Feb saw sharp jump in prices as Food minister ruled our stock limit imposition. However eyeing election govt came up with series of announcement to control spiraling sugar prices starting with allowing duty free imports and followed by imposing stock limits. Price have fallen by almost 10% since the highs made in Feb and are likely to remain stable in coming days as no fresh bulk buying or demand season is coming up and govt will keep the pressure on traders and hoarders to control price rise. However outlook for April month onwards definitely looks promising which I'll write in my next blog... keep reading

Stock Limit announced

India Thursday issued a notice that sets sugar stock and turnover limits, with ceilings to be announced later by state governments, according to Dow Jones. The move limits the amount of sugar that can be stored by companies. The notification will be effective from March 27 for the following four months, the statement said. In Kolkata, the capital of the eastern state of West Bengal, recognized traders can hold stock of 10,000 bags of 100 kg each, while others are allowed to hold a stock of 2,000 bags. "It will bring down the prices by INR40-INR50 per 100 kg (US$0.77-US$0.96) as traders would offload their surplus stocks," said Mukesh Kuvadia, secretary of Bombay Sugar Merchants Association.

India Sugar... We never change

In my last review I was quite optimistic about the change and progress Indian sugar industry was experiencing, but sadly it was very short lived and today when I look at the numbers it reminds me of same story of last booms and busts every 3-5 years..... The way India's production numbers are falling outsiders are making joke of it and saying that "we never change". Ironically during 2008/09, India was indeed an exporter of sugar, about 5 million tonnes of sugar were exported, including 2.9 million tonnes of raw sugar. Now this year we are Net Importer and have already contracted 1.5mmt primarily from Brazil. I estimate that we should close this season with about 17.5mmt with consumption of about 23mmt.

As we talk to states MH is down about 45% to 5.1mmt, UP at about 4.8mmt and rest others also declining in more or less same %age.

Sugarcane farmers have been paid really well this season which will prompt them to grow more cane in future and hence 2009/10 looks to be a better years in terms of availability.

Imports have already started (Early contracts were made @ $310-340 per mt) which today looks a real good buy. World market reacted to Indian demand and gone up sharply to touch $400 per mt recently.

I personally feel very sad about the way we operate such critical industry to take some political mileage and capture vote banks. Rather there is a strong need to empower farmers to grow more crops not only sugarcane but more of wheat, soybean, cotton etc to ensure that our 70% population, which lives in village and is depending on agriculture, propels the economic growth to take us through this recession...