NEW DELHI: India may be the only country able to fill a looming global supply gap for sugar as the Brazilian crop ends, making the world’s sugar market grateful for the Asian country that was once viewed as a threat to the market’s stability.
“Without India filling this gap, from November to March or April, the global sugar market would have a serious problem,” said Paulo Roberto de Souza, the Chief Executive of Alvean Sugar SL, the world’s largest sugar trader, report agencies.
In an interview, Souza said sugar buying is about to increase even as the drought-hit crop in top grower Brazil winds down and costs for the commodity, as well as for ocean freight, have increased sharply.
He said that sugar consuming countries have been heavily reliant on available stocks during the year to avoid paying high shipping and sugar values, adding that those stocks are currently at critically low levels.
“Now they have no choice,” he said, expecting an increase on orders in the market that will have to be met by Indian producers, but at a higher price.
Sugar prices are near their highest since early 2017 mainly due to poor production in top grower Brazil following drought and frosts.
Alvean’s research department does not see much improvement in Brazil next season, expecting a cane crop of around 530 million tonnes and sugar production at around 32-32.5 million tonnes for the center-south region.