For the Quarter Ending June 2022
In North America, the price of Sugarcane is fluctuating throughout the Q2 of 2022, owing to the mixed market sentiments. In the first half of Q2, the prices decreased due to the ongoing Russia-Ukraine war, which led to disruptions in the supply and global food inflationary pressure. In the second half of Q2, prices increased due to an increase in demand from the downstream industries, including Sugar mills and food sectors. Low inventories with high offtakes have led to an increase in the price in the local market. The fluctuation in the price of the product is due to the unstable market dynamics resulting in the variation in the market value in each quarter.
In Asia-Pacific, the price of Sugarcane decreased in the Q2 of 2022, backed by the ample availability of Sugarcane and excess production. In the first half of Q2, Maharashtra is facing a problem of plenty. The final phase of the sugar season requires the crushing of about tonnes of Sugarcane. The state is anticipated to produce about 13.2 million tonnes of sugar, according to sugar commissioner Shekhar Gaikwad. According to the analysis, Maharashtra has already crushed over 116 million tonnes of cane, and just about 9 million more need to be. The state's highest production and million tonnes of sugar had already been diverted for ethanol production.
In Europe, the price of Sugarcane is decreasing due to increased imports from the major exporting countries. In the first half of Q2, the product price decreased as the import increased, and the local market flourished with ample inventories. In the second half of Q2, the price of the product was persistent in a downward trajectory due to low upstream and input costs. The price was decreased due to ease of demand from the end-use industries. The offtakes from the ethanol industries are high, but due to stockpiling of the product, there is surplus product to feed the consumer's needs.
For the Quarter Ending March 2022
In the first quarter of 2022, sugarcane prices increased from the last quarter of 2021. At the commencement of the first half, the price increased as the production was sluggish owing to the poor yield of sugarcane in the US. Consequently, the US was entirely dependent on sugarcane imports from the major exporters, Mexico and Brazil. In addition, the sugarcane yield in Brazil was also less than expected due to poor climate conditions resulting in reduced supply and soaring prices. Also, with the onset of the second half, sugar consumption and demand increased, combined with supply chain disruptions related to the constraints of supply, rising energy, and logistics costs, contributing to the sugar price growth.
In the first quarter of 2022, sugarcane prices rose considerably every consecutive month. Increasing demand from downstream industries like sugar and ethanol production contributed to the surging prices of sugarcane. Despite the pandemic, India met the increasing demand for sugar, globally. With surging crude oil prices, Brazil diverted the sugarcane processing more towards producing ethanol than sugar affecting the supply-demand equilibrium for sugar. The sugarcane yield in Brazil was also less than expected due to poor climate conditions, which reduced supply and soared prices, globally.
White sugar and ethanol production surged the sales and revenue of the major sugarcane producers in the European market. Substantial cost inflation in the product price boosted the market in this quarter. Surging Co-product prices along with forwarding cover for energy offset increased the input cost of white sugar in Q1 2022. Towards the second half of the quarter, higher yield and increased sugar production slowed down the prices in the UK. Supply constraints and increased demand from the end-user industry supported the price trend. In the first quarter 2022, the prices of sugarcane increased. Accelerating demand from downstream, the prices of sugarcane increased drastically in Q1 2022 when compared with the previous quarter.