Việt Nam's sugar prices move against global trends

Việt Nam's sugar prices move against global trends

Sugar prices declined in Việt Nam in February, opposite to global markets.

Farmers harvest sugarcane in Hòa Bình Province. The sugar demand would remain weak due to post-Tết (Lunar New Year) market conditions — VNA/VNS Photo

While sugar prices in Indonesia, the Philippines and China increased last month, Việt Nam's sugar prices witnessed a decline.

Chairman of the Việt Nam Sugarcane and Sugar Association Nguyễn Văn Lộc said that in February, sugar prices in Việt Nam dropped sharply due to weak post-Tết (Lunar New Year) market demand, while supply remained abundant. 

"Sugar prices in Việt Nam have decreased and are lower than those of other sugar-producing countries in the region. 

"By the end of February, the price of domestically produced cane sugar, depending on quality and granule size, and smuggled sugar had dropped by an average of VNĐ1,600 (US$0.06) per kg compared to early this month," he said.

Regarding the market outlook for March and April, Lộc predicted that demand would remain weak due to post-Tết (Lunar New Year) market conditions and an increasing shift toward consuming liquid sweeteners such as high fructose corn syrup (HFCS).

Meanwhile, he said the sugar supply will likely continue to be abundant, including sugar from the new 2024-25 crop and unsold sugar from the 2023-24 crushing season.

Lộc further stated that sugar mills in Việt Nam are processing the 2024-25 crop, with some mills already ceasing operations due to running out of sugarcane. The cumulative sugar production from the beginning of the season until the end of February reached 5.08 million tonnes of crushed sugarcane, yielding 476,000 tonnes of various types of sugar.

"The market will continue to face an oversupply, leading to a deeper decline in sugar prices. Illicit and imported sugar from ASEAN will continue to dominate the market, making it difficult for produced cane sugar to be consumed in the coming months," Lộc said.

In contrast, according to the Philippine Sugar Regulatory Administration (SRA), the country's sugar prices remained high in February. The wholesale price of refined sugar in Manila's metropolitan area, measured in Philippine pesos per 50kg bag, was PHP3,629 ($63.36) on February 18 and PHP3,625 ($63.29) on February 25, approximately $1.27 per kilogramme.

In Indonesia, the Data Centre and Information Systems of the Indonesian Ministry of Trade showed that the average sugar price measured in Indonesian rupiah per kilogramme was IDR18,600 ($1.13) on February 18 and IDR 18,700 ($1.14) on February 25.

Lộc cited data from the International Sugar Organisation (ISO) in February indicating a rising price trend for raw and refined sugar in global commodity trading. This increase was driven by concerns over declining production in India, one of the world's leading sugar producers.

Reports also indicated that below-average rainfall in Brazil had hindered sugarcane growth in some regions. If the dry conditions persist, the sugar harvest, scheduled to begin in April, could be delayed, further impacting production.

According to ISO’s February market report, the projected global sugar deficit for the 2024-25 season was 4.9 million tonnes. The average global sugar price in February stood at $530.71 per tonne, compared to $496.37 in January and $529.06 in December 2024.

However, in late February and early March, global sugar prices showed signs of decline. This was significantly influenced by the expiration of March raw sugar contracts.

The volume of sugar deliveries to the exchange reached a record high for a March contract, exceeding 1.7 million tonnes. Such strong deliveries suggest weak demand, forcing sugar holders to offload their stockpiles. 

Bizhub