Belize’s sugar industry set to benefit from India’s decision to restrict sugar exports



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Posted: Wednesday, May 25, 2022. 6:46 p.m. CST.

By Ruben Morales Iglesias: India, the world’s second largest sugar producer behind Brazil, has decided to limit its sugar exports to 10 million metric tons for the rest of the sugar year ending in September. This move could cause a shortage and drive up prices even further, but for Belize it could prove beneficial as it can help open up new markets for our sugar.

International sugar prices have soared 20% over the past year, according to Business Insider. Prices have been pushed higher by several factors, including the COVID-19 pandemic, skyrocketing global energy prices, the Russian-Ukrainian war which has boosted food and fertilizers, as well as the decision of several large countries like India to restrict their exports to counter inflation.

“This is great news for all sugar producers around the world. Unfortunately, we are very small, but this will have a positive impact on our economy and on the economy of sugar cane growers,” said Marcos Osorio, Chairman of the Sugar Industry Control Board (SICB).

Osorio said that apart from India restricting its exports, Brazil, the largest producer, was also doing the same and producing biofuel from sugar-based ethanol to counter rising fuel prices.

But even before India’s decision to limit its exports, Belize was proactive.

“Belize has taken aggressive steps to source supplies and secure more markets to have more options, especially when prices are down,” Osorio said. “BSI/ASR has opened up new markets. They looked at the Middle East. This is a major area that they see as a market for Belize. »

Osorio said Belize stands to gain from the global sugar market situation.

“This means a good opportunity for Belize in terms of getting a better price for our sugar and we believe this will continue into next year as well. “Ukraine. It just means that Belize sugar will see a big increase in terms of revenue from sales.”

Osorio said Belize’s sugar production averages 1,200,000 tons of cane sugar, which typically yields around 125,000 tons of sugar. However, this year, with production already over 90,000 tonnes of sugar, the projection by the end of the harvest is 130,000 tonnes of sugar or better.

“If we can achieve that, it just means a greater revenue stream for Belize, especially for the northern sugar industry. This will result in better prices paid to sugar cane growers, a big impact on the national economy,” Osorio said.

Osorio said the conditions have come together for a good sugar production season and he wished we could be in a position where we can produce a lot more.

“This year the climatic conditions have been good, the mill has performed better than other years, the farmers have done their part in terms of better harvesting practices, so currently we have a year with very good quality which then translates by greater sugar production,” he said.

“We hope that if the weather continues to hold, … yes, we had rain yesterday and the day before yesterday, but it does not have much impact on the harvest, … we estimate that we can make more deliveries to the mill so that it can receive more than 1.2 million tons of cane and considering the quality of the cane, we hope to be able to obtain more than 135,000 tons of sugar.

Osorio said that after subtracting the annual local consumption of about 13,000 tons, Belize would have about 122,000 tons of sugar to export.

“We can export as much as we produce. With the current situation in Brazil and India, if we had 200,000 tons of sugar, I can assure you that the market would be there to demand this sugar at very good prices.

“The prices we estimate will continue to rise. We expect it to reach US$0.25 per pound. If this happens, farmers will have a very good year in terms of yield from their sugar cane production. »

Osorio said Belize is currently selling its sugar at $0.05 a pound more than usual.

“The information we just got from the factory is that we are selling at US$0.19 per pound, which is a very good price compared to previous years when we were selling at US$0.15 and 0 US$.14 per pound. In general, the price is good for this year and we hope to bring in a few pennies more in the later part of the sugar cycle. »

However, Osorio said not all sugar sells for the same price and we have to keep in mind that Belize sells some of its production on the futures market.

“This means that Belize sold some of its sugar before we even started the harvest season, which is already price-locked. So it’s the other sales that are made on demand that would benefit from prices. higher than we expect in the coming months,” he said.

Osorio said about 30,000 tonnes of Belize sugar was sold on the futures market at a guaranteed price of US$0.17 or US$0.18 per pound.

Regarding India’s decision, Osorio believes that its restriction of sugar exports is also a marketing strategy.

“I believe India is looking to the future. They will keep their sugar and resell it later when prices are even higher. It’s a marketing strategy. I think they will stick to their compromises in terms of volumes of sugar to export and keep any surplus they have and resell later at a higher price.

In the meantime, Belize stands to benefit.

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Rachel J. Bradford