Crop failure in Brazil increases India’s role in the sugar trade

With the problems affecting sugar production in Brazil and Thailand, India should play an even more relevant role next year in the global sugar market, according to a projection by trading company Alvean. Brazilians and Thais are currently the main exporters.

According to Eric Cheng, regional head of Alvean in Asia, it will be difficult for Brazil to recover crushing volumes in the Center-South in 2022-23 that were reduced by drought and frosts in the middle of this year. If the La Niña weather leaves the humidity higher than normal, there is a risk that crop losses will be even greater next year, he said.

The adverse climate in Brazil has heightened concern about the global sugar supply, which has pushed sugar futures to their highest level in four years. Although India exports less than Brazil and Thailand, the market closely follows the country’s supply, and some Indian exporters now expect global prices to rise further.

See the chart below for a history of Brazilian sugar exports from 2019 onwards. Data are from DataLiner:

Brazilian Sugar Exports (HS 1701) | Jan 2019 to Aug 2021 | WTMT

Source: DataLiner (To request a DataLiner demo click here)

“India will take control of sugar prices next year,” Cheng said during an online seminar held on Oct. 5 by the Indian Sugar Mills Association. Prices in New York will need to be negotiated at a premium to India’s break-even export parity for Indian shipments to rise, he said.

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/agronegocios/noticia/2021/10/05/quebra-de-safra-no-brasil-eleva-peso-da-india-no-comercio-de-acucar.ghtml

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