SunSirs: Agriculture: White Granulated Sugar is in Off-Season And Price is Under Pressure

1. Price Trend

According to data from SunSirs, the price of white sugar fell this week. The average price of first-grade white sugar at the beginning of the week was 5,900 RMB/ton, and the average price of first-grade white sugar at the weekend was 5,826 RMB/ton, and the price fell 1.24%.

2. Market Analysis

Future: In the new pressing season, the world's major sugar producing countries are expected to reduce production, and the raw sugar swings upward to boost sugar futures prices in Zhengzhou exchange. The initial domestic sugar inventory in the new pressing season is still at a low level. And the demand surge with the approach of double holidays. In the short term, there will be support under the price of Zheng sugar.

Supply: The northern sugar beet sugar production is expected to increase slightly this season, and the overall crushing progress of the sugar mill is faster than the same period last year. After mid-November, the southern sugar cane sugar mill has started to speed up. As some of recent production is aimed at fulfill the pre-order, the supply is under less pressure. However, since December, domestic sugar production will increase sharply. The peak sugar production period will be from January to March of the following year. When the peak demand season basically ends, the consumption enters into off-season, which will add supply pressure. It is expected that domestic sugar prices will be under pressure.

International Market: Up to November 15th, the main sugar-producing state, Mapang, has not yet been pressed. The number of sugar mills opened in India is 100, which is much lower than that number at 310 in the same period last year. The cumulative sugar production is 485,000 tons, which is much lower than 1.338 million tons in the same period last year. India's domestic sugar stocks and export are under great pressure. The initial stock of Indian sugar in the new pressing season is expected to be 14.581 million tons, and the sugar production in this pressing season is still slightly higher than the consumption. To ease the pressure on domestic sugar stocks in the 2018/2019 season, India has established a 3 million tons sugar buffer stock and set a sugar export target of 5 million tons. Until the end of the season, only 3.8 million tons of sugar exports have been reached. The Indian government extends the sugar export quota period for the 2018/2019 crushing season to the end of December 2019.

3. Market Forecasting

SunSirs' analysts believe that the new domestic sugar has not yet been available in the early stages of the crushing season, and the demand season also supports domestic sugar prices. However, as the major producing countries in the northern hemisphere are concentrated, domestic and foreign sugar markets will still face supply pressure. The sugar storage in Guangxi has been auctioned off, and the national sugar storage is still likely to be dumped. In the short term, Zheng sugar's upward momentum is insufficient.

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