More than 100 countries of the world are producing sugar primarily from sugarcane due to lower cost as compared to processing sugar from sugar beet. About 78 percent of sugar is produced from sugarcane and the remaining from sugar beet. Currently, sugar producing countries consume about 69 percent of their production, whilst the balance is traded in the world market. Because of the residual nature of the world market, the free market price is one of the most volatile of all commodity prices.
Sugarcane is a cash crop and an important source of income and employment for the farming community. It provides raw materials to chemicals, plastics, paints, synthetic, fibre, insecticides and the detergent industry and it also used as raw material to produce gur, molasses, alcohol, sugar beverages, chipboard paper and confectionery.
WORLD SUGAR SCENARIO Brazil is the first largest country for producing and exporting sugar with production of 31.355 million tones and 20.957 million tones of export while per capita consumption of sugar in Brazil is 58 KGS, followed by India 28.804 million tones production and 3.298 million tones export and 20 KGS per capita consumption, China 14.674 million tones production and 11 KGS per capita consumption. Pakistan is producing 4.891 million tones of sugar and per capita consumption in Pakistan is 25 kilograms. Country
3RD INTRNATIONAL SUGAR ORGANISATION (ISO) ASSESSMENT REPORT In the third assessment of the ISO, world sugar production is put at 161.527 million tonnes. A significant production shortfall in India and a further contraction of production in the EU, on the one hand, and a continuing expansion of sugar output in Brazil, on the other hand, are the three major supply features of 2008/09.
The combined effect of output reductions in the EU and India is expected to shave off a massive 7.084 million tonnes from world sugar supply, despite record high growth in sugar output in Brazil. So far, a lowering in forecasted production in India (from 23.9 million tonnes projected in August to the current projection of 19.55 million tonnes) has been neatly matched by a practically identical increase in Brazil (from 33.22 million tonnes to 37.54 million tones).
Meanwhile, global consumption is forecasted to grow at the rate of 2.19% to 165.801 million tonnes, raw value. World production is now expected to be 4.274 million tonnes lower than world consumption, as against 3.626 million tonnes projected in November. Consequently, the statistical outlook for the market, till the end of the season in September 2009, remains constructive and supportive to world market values.
The ISO puts world export availability for 2008/09 at 49.608 million tonnes, raw value, as against 46.25 million tonnes in the previous crop cycle. Smaller output in importing countries and in India, in particular, is expected to trigger additional import demand, which is estimated to reach 49.621 million tonnes, up 3.673 million tonnes.
BRAZIL So far, the weather has been unstable in the all important Centre-South since the beginning of the new campaign in April. Cumulatively, since the beginning of the harvest, however, sugar output to 16th August reached 15.3 million tonnes, up 23.4% year-on-year. A much higher proportion of cane has been allocated to sugar compared to last year, or 43.33% relative to 40.07% in the year-ago period.
Mills have been ramping up their sugar capacities to a maximum level to take advantage of soaring world market sugar prices. According to the industry, of the 23 new mills expected to start crushing in 2009/10, by the end of August, just 12 should be operational. In terms of the October/September season, in 2009/10, Brazil's sugar production is expected to grow to 38 million tons, raw value, as against 37.9 million tons estimated for the previous October/September cycle.
CHINA China, the world's second-largest sugar consumer after India, will see its deficit of the sweetener reach 700,000 tons this year. Sugar consumption in the country will reach 14 million tons this year, while supplies will be about 13.3 million tons. However, Chinese sugar imports soared 57% to 863,000 tons during the January-July period. China has a long-standing agreement to import 400,000 tons of Cuban sugar a year.
THAILAND Thailand, Asia's biggest sugar exporter, could produce 7.6 million tons of sugar in 2009/10. The 2009/10 crushing season is expected to start in November, when the cane is harvested, and run through April 2010. Thailand aims to export as much as 5.7 million tons in 2009-10, the highest ever, thanks to the big supply surplus. In the 2008/09 crop, Thailand produced 7.14 million tons of sugar and exported 4.9 million tons in 2008. Thailand generally uses about 1.9 million tons of sugar for domestic consumption each year and the rest is exported.
AUSTRALIA In April, the ABARE projected sugar production to fall by 2.1% on the year to 4.56 million tons. Later in the season, however, industry experts suggested that 2009 sugar production was likely to beat official forecasts and almost matched last year's outcome, as losses both in terms of cane yields and sugar content had not been as severe as originally feared, due to weather and smut disease.
So far, weather during the first part of the campaign, that usually starts in June and ends in December, has been favourable. Moreover, sugar output may be more stable in the years ahead as high prices are encouraging farmers to increase cane areas. With more cane being planted, there may be some increases in sugar output next year and the year after. The industry also expects that smut should no longer be an issue for Queensland sugarcane growers by 2012.
SOUTH AFRICA In South Africa, by far the biggest sugar producer in Africa, sugar cane production in the 2008/09 (May/April) season fell by 400,000 tons to 19.3 million tons compared with the previous season, owing to a sharp rise in input costs. According to the South African Sugar Association, sugar production in the year also fell by 13000 tons to 2.26 million tons.
The country's output has stagnated at a level of about 2.3 million tons, raw value, over the past few years. Currently, there is no evidence to suggest a major upswing in the coming season.
SUGAR SCENARIO IN PAKISTAN In Pakistan, demand and supply of sugar is not balanced. Pakistan is not a sugar exporting country, it imports sugar to meet the domestic demand. Pakistan imported 260840 MT of sugar in 2007-08 and 23980 MT in 2008-09. According to Pakistan Sugar Mills Association (PSMA), sugar production in Pakistan in the current season fell to 3.2 million tones from 4.35 million a year ago. The government is likely to import 200,000 tones of raw sugar to overcome the current sugar crises in the country.
The current sugar crises in the country has not only affected the common person but also forced the Government to revise the progress of sugar industry to control the price hikes and assure availability of sugar. Before the beginning of the Ramazan it disappeared and is now available on high prices, which has badly affected the life of the common man during the holy month.
Pakistan, despite being an agrarian country, is not self sufficient in sugar production for domestic requirement. Pakistan is the biggest consumers of sugar in South Asia, with 25 kg per capita consumption per year, whereas in India it is 20 kg, Bangladesh 10 kg and China 11 kg. Sugar consumption in Pakistan has been showing an increasing trend since the 1980s, because of the rapid increase in the total population of the country, which has reached 170 million.
Average recovery of sugar from sugarcane in Pakistan is below 9 percent whereas in the neighbouring countries the average recovery rate is over 10 percent. The average recovery rate is stagnant in crushing sugar. Although, Pakistan is the world's fourth largest grower of sugarcane, but yield per hectare is the lowest in the world. The average yield in Pakistan is less then 50 tons per hectare.
Despite the fact that sugar production have doubled during the last eight years and government has also doubled the sugarcane support prices, but its availability on a cheap rate is not assured. The consumption of sugar in Pakistan is strongly related to religious events in the Islamic calendar so; the government should also keep a record of the stock and consumption of sugar according to the Islamic calendar.
It is however, unfortunate due to the crisis in the sugar industry that the consumers are the sufferers, who have to buy the essential item at a much higher rate with a limited supply. It may be recalled that before start of the crisis, sugar was being sold at a price of Rs 36 per kg, which shot up to the level of Rs 55 per kg before the month of Ramazan.
In the best interests of the people, the authorities concerned in Pakistan, especially those looking after the agriculture sector would have to evolve a policy to keep the supply and price of sugar in line with the buying power of the people at the grass root level.
================================================================
World Sugar Balance
================================================================
2008-09 2007-08 change
================================================================
(mln tonne raw value) in mln t tin %
================================================================
Production 161.527 168.611 -7.084 -4.2
Consumption 165.801 162.241 3.56 2.19
surplus/deficit -4.274 6.37
Import demand 49.621 45.948 3.673 7.99
Export availability 49.608 46.245 3.363 7.27
End Stocks 66.272 70.533 -4.261 -6.04
Stock/consumption 39.97 43.47
================================================================
Source ISO quarterly market outlook,2009
============================================================================
Country Production Exports Population Per capita
million tons million tons millions consumption kgs
============================================================================
BRAZIL 31.355 20.957 [1] 190 58
INDIA 28.804 3.298 [4] 1 117 20
EU 17.567 1.400 [8] 490 34
CHINA 14.674 1 314 11
THAILAND 8.033 5.288 [2] 65 36
UNITED STATES 7.701 301 29
MEXICO 5.978 0.350 [15 107 52
SADC 5.834 2.410 [5] 157 22
AUSTRALIA 5.013 3.750 [3] 20 47
PAKISTAN 4.891 165 25
============================================================================
-- World export ranking
-- (Source: ED&F Man - 2007/08, October-September basis). The international sugar season runs from September to August
-- Historical Trend in Sugarcane Crushing, Sugar Production and Recovery %
===============================================================
Nos of Sugar
Mills Cane Production
Year Operated Crushing Ton % Ton Recovery
===============================================================
2000-01 65 29,410,790 2,466,788 8.38
2001-02 68 36,708,638 3,197,745 8.71
2002-03 70 41,786,689 3,654,693 8.75
2003-04 71 43,661,378 3,997,010 9.15
2004-05 71 32,101,739 2,922,126 9.1
2005-06 71 30,090,633 2,588,176 8.6
2006-07 77 40,468,015 3,515,947 8.7
2007-08 78 52,776,922 4,740,913 8.98
===============================================================
Source: PSMA
============================================================
Sugar Production in Pakistan
============================================================
Year Sugar Cane Beet Sugar Raw Sugar Total
============================================================
2000-01 2,466,788 17,276 531,930 3,015,994
2001-02 3,197,745 29,172 22,111 3,249,028
2002-03 3,654,693 22,066 1,945 3,678,704
2003-04 3,997,010 23,797 - 4,020,807
2004-05 2,922,126 11,373 182,302 3,115,801
2005-06 2,588,176 8,934 401,396 2,998,506
2006-07 3,515,947 7,143 2,860 3,525,950
2007-08 4,740,913 5,532 5,929 4,752,374
============================================================
==============================================
(Rupees per 40 Kgs)
==============================================
Year Sindh Punjab NWFP Quality
Premium
==============================================
2000-01 36 35 35 0.5
2001-02 43 40 40 0.5
2002-03 43 40 40 0.5
2003-04 41 40 40 0.5
2004-05 43 40 40 0.5
2005-06 48 45 48 0.5
2006-07 67 60 65 0.5
2007-08 67 60 65 0.5
2008-09 81 80 80 0.5
==============================================