After a decline in the first 2 months of the year, the world sugar price as well as the domestic sugar price increased again in March. The sugar market is expected to remain positive in the near future as crude oil prices climb up in response to the impact. of the conflict between Russia and Ukraine, raising the possibility of converting sugar production to ethanol production in Brazil, the world’s largest sugar exporter.
According to information from the International Sugar Organization (ISO), in March, spot raw sugar prices spiked to a 4-month high with an average of 19.1 Cents/lb, an increase of 6.7% compared to 17. 9 Cents/lb in February and up from 18.2 Cents/lb in January.
The white sugar price index also increased sharply to the highest level in recent 5 years with 528.4 USD/ton compared to 488.2 USD/ton in the previous month.
According to international analysts, the conflict between Russia and Ukraine has shaken commodity markets, but the impact on the sugar market is mainly indirect through crude oil prices.
Higher crude oil prices will increase demand for sugar-based ethanol (mainly in Brazil) and reduce sugar exports.
Brazil, the world’s largest sugar producer and exporter, uses about 55% of cane production for ethanol production and about 45% for sugar, much of which is exported.
In addition, export restrictions from India – the world’s second largest sugar exporter, may boost sugar prices.
These factors are expected to continue to support sugar prices in the near future. However, the upside momentum will be somewhat limited as the conflict between Russia and Ukraine slows down global economic growth, increases inflation in many countries and reduces demand for goods.
Diễn biến giá đường thô thế giới trong tháng 3/2022. (Nguồn: ISO, ĐVT: Cents/lb )
In the domestic market, the price of sugar also increased slightly by about 200 VND/kg in the second half of 3. However, in the first quarter, the price still decreased by 200 – 600 VND/kg due to a decrease in demand due to the impact of the COVID-19 epidemic and supply. abundant because the whole country entered the 2021-2022 pressing season, while smuggled sugar from Laos and Cambodia continued to flood in.
According to the Vietnam Sugar Association (VSSA), the supply is abundant while the demand for sugar has not increased, so there will be no shortage of sugar in April and the following months. imported sugars and sweeteners.
The domestic sugar price will fluctuate in line with the world sugar price, which is currently at the highest level in the last 5 years.
The price of sugar in the coming time also depends on the effectiveness of efforts to combat fraud in the trade of smuggled sugar. If the control of smuggled sugar is effective, the sugar price will be at a level close to that of other countries in the region (but still lower), VSSA said.
A recent report of Mirae Asset Vietnam Securities stated that when Vietnam officially reopened to international tourism from March 15, there were no longer any restrictions for all types of businesses and food consumption activities. , domestic beverages are expected to recover to pre-COVID-19 levels in 2022.
However, the recovery of the food and beverage market will be hindered by the consequences of the Russia-Ukraine war leading to price escalation, high inflation rate affecting people’s pockets.
Mirae Asset forecasts that this year, the price of sugar will increase when it recognizes that the price of sugarcane will increase, but the output of businesses will decrease.
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