As one of the most important agricultural products, recent increases in sugar prices have raised market concerns. Business agency data show that the spot price of white sugar on 6 september was $7390 per ton, a cumulative increase of 1. 37 per cent for almost two weeks (24 august to 6 september), surpassing the historical height since october 2011 and continuing to be close to the historic record of $7830 per ton in august 2011。
The official responsible for the sugar industry, who was called as an investor by a journalist in the daily securities journal, stated that the company's sugar business was currently operating normally, that since the third quarter, the sugar business had developed more favourably and that the price of the company's sugar products had continued to grow as market prices had risen. “the company's sugar beet-crushing line is entering a new extraction season, with capacity utilization largely influenced by the feedstock end, and the operation is now relatively smooth, with orders and production increasing in comparison with the first half.”
The vice-president of the east high institute of technology and technology (seti) reported to the daily securities journal that the continued growth of domestic sugar prices in recent periods was influenced by multiple factors, such as the tight balance of supply and demand, and that it was expected to remain strong over the next six months, with an expected shock。
Sugar prices are still expected to rise
On the futures market, open data show that as of 6 september, the domestic sugar master contract had been reported at $7117 per ton, an increase of 0. 89 per cent that day and a cumulative increase of 4. 37 per cent over the past two weeks. Approaching a high point of $7150 per ton in may 2023, domestic sugar futures prices have been at historically high levels since april this year。
On the international market, data from the arts and literature show that, as at 5 september, the original ice sugar futures contract price was 26. 59 cents per pound, an increase of 2. 82 per cent, which once touched 26. 94 cents per pound, updating the high since october 2011。
In an interview with the daily securities journal, sun joy, an information and sugar analyst, stated that the price increase in the domestic sugar market this year had been driven mainly by the supply side, with both production and imports falling sharply. From the point of view of domestic production, between 2022 and 2023, the country produced 8. 97 million tons of sugar, a decrease of 6. 17 per cent over the same period, mainly as a result of the reduction in production in guangxi, the main area of production. Guangxi, the country's main sugar producer, accounts for about 60 per cent of the country's sugar area and production. In the second half of 2022, drought in guangxi was frequent, with high temperatures and low rainfall affecting sugar cane growth, with sugar production falling from 13. 89 to 5. 27 million tons during the 2022-2023 squeeze season。
“from an import point of view, continued high international sugar prices have led to higher costs of imported sugar and lower incentives for domestic imports. According to data from the general customs administration, by the end of july, china had accumulated 2. 98 million tons of white sugar imported in the 2022-2023 season, a decrease of 23 per cent over the same period。
It added that, on the domestic market, with the onset of a boom in sugar consumption, there was strong demand for supplies in mid-autumn and downstream demand for sugar showed signs of heating up, which, together with supply factors, pushed up sugar prices. At the same time, the continued increase in domestic white sugar prices is also associated with higher international white sugar prices. From a global market perspective, supply bias is the main reason for the strong international sugar prices, and while brazil, the home country, continues to increase production to contain the rise in raw sugar, concerns in india and thailand about the potential impact of inadequate rainfall on sugar cane harvests continue to support strong sugar markets. Market institutions are generally expecting a reduction in the new dry season in india, which is expected to ban sugar exports from october, increasing market panic and rapidly increasing white sugar prices。
Will domestic sugar prices remain strong in the future? On the supply side, sun said that the new squeeze season had only begun in october and that there were few stocks available in sugar factories, while the price of imported sugar remained high, import growth was limited and market supply was expected to remain tight. On the demand side, the demand side is driven by holiday supply, improved demand for downstream sugar-based food purchases and generally low stock in mid- and downstream, and there is a demand for replenishment. “the combined white sugar market supply and demand is expected to maintain a moderate trend in the white sugar market until the start of the new squeeze season in october, with sugar prices still expected to rise. As domestic sugar production progresses in the four quarters, supply constraints ease and sugar prices fall.”
The price of sugar continues to improve
In the first half of the year, many companies in the a stock market were more profitable, driven by a sustained increase in sugar prices, and several companies, such as the nanning sugar industry and the chinese food sugar industry, reported that net profits attributed to shareholders in listed companies increased over the reporting period。
According to the daily securities journal reporter, there are eight listed companies directly related to sugar sales in the a stock market, and the eastern wealth choice data show that six of the eight listed companies achieved a year-on-year increase in net returns to their mothers。
In its mid-term performance report for 2023, the chinese and chinese sugar industry noted that in the first half of the year, international sugar prices were high. On the domestic front, our sugar production has fallen more than expected, and domestic production and sales data have continued to improve, and import profits have remained in serious reverses, cutting off import windows and contributing to high domestic white sugar prices。
According to the above-mentioned head of the sugar industry, the demand for and supply of sugar are expected to remain tightly balanced in the second half of the year, looking to future market demand and prices。
In sun's view, sugar, which is sold annually as a quarterly crop, is produced from october to may of the following year, with stocks sold at the remaining sugar mills. As a result of this year's decline in supply, the sugar plant's stock consumption rate has accelerated compared to the same period in previous years and is currently below the historical level of the same period. “as sugar plant stocks fall, the pressure to sell new sugar before it is marketed is low, and the sugar factory has a relatively high price mentality. Data from the china sugar association show that by the end of august, sugar production in guangxi, the main production area, was 90. 15 per cent, an increase of 12. 2 percentage points over the same period; industrial stocks had fallen to 5194 million tons, a decrease of 830,000 tons over the same period.”
Depression suggests that the sugar stock rate will continue to benefit from strong sugar prices and demand in the second half of the year, and that good performance will continue。
“the price of sugar is affected in many ways by international and domestic markets. International sugar prices are affected by international trade, weather and other factors, and the continued rise in international sugar prices can support domestic sugar prices. On the demand side, however, as consumption demand continues to release, it has a positive impact on the earnings and profitability of sugar enterprises.”。
