Sugar firms eye sweet season ahead

Sugar firms eye sweet season ahead

Sugar firms are accelerating efforts to avail market opportunities as sugar prices continue to rise amid concerns of a sharp global supply shortage.

Nguyen Duy Thanh, deputy general director of sugar major Lam Sơn Sugar JSC (Lasuco), revealed that the company is processing 7,200 tonnes of sugarcane per day, equal to 400 tonnes of raw sugar, achieving a daily output of approximately 1,100 tonnes. “The company’s production is now at peak time,” said Thanh.

Photo: baodautu.vn

According to the leadership of Thanh Thanh Cong - Bien Hoa JSC (TTC Agris), the largest player in the sugar industry, the company’s business results for the second quarter (Q2) of the 2024-2025 fiscal year (July 1, 2024 to June 30, 2025) are showing positive growth.

TTC Agris is projected to reach $300 million in net revenue, and $9.2 million in net profit, marking a 7.4 per cent increase in revenue and a 30 per cent hike in profit compared to the same period last year.

For the first six months of the fiscal year, the company’s total net revenue is expected to reach $574.4 million, with $21.2 million in pre-tax profit.

In Q2, TTC Agris’ sugar consumption surpassed 360,000 tonnes, marking an 11.25 per cent jump compared to the same period last year.

On the global market, sugar prices have surged due to concerns that countries are reducing supplies.

According to the Indian Sugarcane and Bio-energy Manufacturers Association, sugar production volume in India, the world’s second-largest sugar exporter after Brazil, has slowed. More than 30 sugar mills in India’s leading sugarcane-producing states have ceased operations nearly two months earlier than usual due to a drop in sugarcane caused by unfavourable weather. Last year, only 11 mills closed at the same time.

B.B. Thombare, president of the West Indian Sugar Mills Association, said that last year’s drought had severely affected sugarcane yields in the region.

Many mills are struggling to secure enough raw material, forcing them to halve their production capacity, and they are likely to shut down by the end of this month.

Observers believe that this early closure could result in India’s sugar production being lower than initial estimates.

The early closure of sugar mills in India due to raw material shortages has caused sugar prices to rise by 10 per cent on the domestic market in the past month.

Global sugar supply could further tighten as the production of another major producer, Thailand, is also expected to fall this season.

Additionally, Alvean, the world’s largest sugar trading company, warned on February 13 that lower-than-average rainfall in Brazil had stunted sugarcane growth in some regions.

If the dry weather continues, the sugar harvest, which begins in April, could be delayed, further affecting global sugar output.

The mix of reduced production in India, expected lower output from Thailand, and dry conditions in Brazil is pushing sugar prices higher.

On the global market, sugar prices have risen to more than $450 per tonne, setting the highest level since mid-December 2024.

Sugar prices are also supported by reports that Indonesia is expected to import 200,000 tonnes of raw sugar.

The US Department of Agriculture’s recently forecast that global sugar reserves will hit their lowest point in 13 years.

Looking at the bigger picture, commodity prices, including coffee, gold, corn, and soybeans, have all reached new highs. This indicates that inflationary pressures and rising demand are spreading across various markets.

For the domestic market, the Vietnam Sugarcane and Sugar Association believes that sugar mills and sugarcane farmers in Vietnam are in a very favourable position.

It, however, predicts that in the next sugarcane season (2025-2026), the local sugar industry will face mounting challenges, as the La Nina phenomenon could cause prolonged rainfall and flooding in 2025, negatively affecting sugarcane production, particularly in northern and central regions.

Meanwhile, Shinhan Securities Vietnam predicts that sugar prices will remain high, providing strong momentum for businesses in the industry. Additionally, a policy to tax imported sugar is also considered a positive factor supporting local businesses.

VIR