Isn't it hard to believe that the recent energy crisis has actually affected the price of sugar? Because sugar is also a source of energy. The energy crisis has led to an increase in natural gas and crude oil, while the price of alternative ethanol has also begun to rise, while the price of white sugar, which is shared with ethanol, has also been boosted.
Brazil is the largest sugar producer and exporter, producing 22% of the world's sugar, followed by India at 19%, but most of it is absorbed by domestic demand. 1/3 of China's white sugar needs to be imported, and the import volume accounts for 9% of the total global imports. At present, the output of India and Thailand has been determined, depending on the harvesting situation in Brazil.
UNICA's first half of October reported that sugar production in south-central Brazil reached 1.146 million tonnes, compared to 2.621 million tonnes in the same period last year, a 56% year-on-year decline. This data was not too bad before, but in the first half of October, it took a sharp turn, the reduction in production was staggering, and Brazil may be able to harvest early this season when there is no cane to squeeze.
Due to the impact of drought and frost, Brazil's sugarcane production reduction is nailed down, and it was previously believed that the half-monthly production data was not bad, which is an illusion from the current point of view. Sugarcane yield fell by about 14%, the front and middle period of pressing is actually to grab the amount of late pressing, just like squeezing toothpaste, the early squeeze is more, the back is naturally less. Now the production data is showing problems, stretching over, and the tide is receding.
Brazilian sugarcane crushing capacity (thousand tons)
Brazilian Sugar Ratio (%)
The energy crisis has led to energy prices, Brazil ethanol is not far behind, the price increase hit a record high, according to platts report data, the current Brazilian ethanol sugar price has reached 19.86 cents / pound, supporting the price of new sugar. Sugarcane has been squeezed out, how to supply ethanol in the back, 4 months of sugarcane shortage is embarrassing. As can be seen from the recent Brazilian sugar ratio, more sugar cane is used to make ethanol, less sugarcane, less sugar, and with the support of ethanol prices, raw sugar prices have risen.
Spot Status:
As of October 26, 2021, the spot price of white sugar in Liuzhou, Guangxi Province, was 5,670 yuan / ton, down 10 yuan / ton from the previous trading day. The main price of futures was 5,929 yuan / ton, up 39 yuan / ton from the previous month. From a seasonal point of view, the current spot price of white sugar in Liuzhou has remained at a low level compared with the past 5 years.
Production and sales:
In the 2020/21 sugar production period, the country produced a total of 10.6666 million tons of sugar (10.4151 million tons in the same period of the sugar production period), and produced 251,500 tons of sugar year-on-year. Among them, the sugarcane sugar production was 9.134 million tons (9.0223 million tons in the same period of the upper sugar production period); the output of sugar beet sugar was 1.5326 million tons (1.3928 million tons in the same period of the upper sugar production period). A total of 9.618 million tons of sugar were sold nationwide during the sugar production period (9.85 million tons in the upper sugar production period), and the cumulative sugar sales rate was 90.2% (94.6% in the same period of the upper sugar production period). From the perspective of output, during the sugar production period, China's sugar production is slightly higher than last year, but the sales situation is not good, and the current cumulative sales are not as good as last year.
Availability:
The end-of-period industrial inventory in 2020/21 was 1,048,800 tonnes, the highest year-on-year level in the past five years, validating the poor sales of sugar in The country.
Import Status:
From January to August 2021, the total import of white sugar reached 2.96 million tons, an increase of 33% year-on-year. As can be seen from the figure, Since October last year, China's sugar imports have been at a high level in recent years.
Thailand:
Drought in Thailand is a major factor in the decline in production, and the Thai Sugar Mills Company (TSMC) believes that rainfall is expected to decrease this year. Rangsit expects sugar mills to produce less than 7 million tonnes in the 2021-22 crushing season, well below the previous USDA estimate of 10.6 million tonnes.
summary:
Recently, the domestic sugar spot rebounded, but the futures rose larger, from the perspective of foreign sugar, the price has fallen back from the end of August, these two days are just a rebound, such a market is not overdraft? Brazil's production cuts have been almost digested in terms of external prices, and the October bi-weekly production data has not brought gratifying results to the disk, even in the context of the energy crisis, it has not pulled sugar. Domestic sugar inventory is high, sales are not ideal, in this case, the spot price did not rise sharply, futures with the pull of agricultural products and rushed up, the future market must be vigilant against short-term overdraft kinetic energy correction.
■ Some of the data in this article comes from wind, Founder Mid-term Research Institute, China Sugar Association, South China Futures, GF Futures, UNICA, TSMC, for reference only, does not represent the views of this platform and its institutions, and is at your own risk. The futures market is risky, and investment needs to be cautious!