Weak sugar market amid high inventories
Global sugar prices have surged, lifting domestic market rates, but trading activity remains subdued as heavy inventories weigh on demand, according to sugarcane and sugar traders.
India, the world’s second-largest sugar producer, imported sugar for the first time in nearly a decade due to low domestic yields caused by El Niño-induced weather, triggering a global rally.
“India’s production fell so much that it had to import, leading to a global sugar price jump. Even though India’s market doesn’t directly affect Myanmar. As global market prices rise, domestic prices relatively follow,” said a trader who is a member of the Myanmar Sugar and Cane Related Products Association (MSCA). The Mandalay Commodity Exchange also witnessed a sharp increase between 22 and 28 August.
Despite the price increase, trading volumes remain slow due to domestic stockpiles and declining exports, particularly to Vietnam. This year’s total exports are reportedly below 100,000 tonnes.
According to the International Sugar Organization (ISO), global sugar prices on 20 August showed an increase of 3.41 per cent over the month. As of 28 August, prices were hovering between US$510 and $538 per tonne.
The current rise is unlikely to benefit cane growers, as the crushing season has ended and most stocks are now in the hands of traders and millers, farmers pointed out.
Last season, sugarcane output in Upper Sagaing Region fell by hundreds of thousands of tonnes. Some mills also delayed payments to farmers or compensated them with sugar instead of cash, leading to tensions between the two sides. — TWA/KK
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