Sugar Rush: Rs 30,951/Tonne, Farmers Rejoice

The Mauritius Sugar Syndicate has finalized the price of sugar for the 2023 crop at Rs 30,951 per tonne, a significant increase from Rs 25,554 per tonne for the 2022 crop. This marks a 21% increase compared to the previous year and a whopping 52% rise from the 2022 harvest.

According to Devesh Dukhira, Chief Executive Officer of the Mauritius Sugar Syndicate, this increase is due to exceptional market conditions in 2022, which saw a global sugar shortage and high prices.

The war in Ukraine had also driven up the cost of sugar production from beet, while India had ceased sugar exports and Thailand experienced a decline in production.

These factors contributed to a surge in global sugar prices.

Additionally, the depreciation of the rupee against other major currencies has further boosted sugar prices.

“Last year was exceptional, and we’ve seen that continue into the early part of 2023,” Dukhira noted. “However, we’re starting to see a decline in prices on the global market.”

The price of sugar on the global market has already fallen by $150 per tonne in the last quarter of 2023, indicating that prices for the 2024 crop may not reach the record highs seen in 2022 and 2023.

“We won’t see the same record-breaking prices as we did in 2022 and 2023,” Dukhira cautioned.

“Those were exceptional years, and we need to prepare for a decline in prices for the 2024 crop.”

To mitigate the volatility of prices, the Sugar Syndicate is focusing on niche markets, including Bottlers Grade sugar, which is in high demand from bottlers and offers additional premiums.

The syndicate is also encouraging farmers and producers to invest in their practices and improve yields during periods of high prices.

“Investing during good times is crucial,” Dukhira emphasized. “We’ve seen significant replanting of fields, resulting in improved yields. That’s why our sugar production was higher in 2023 (238,854 tonnes) compared to 2022 (232,707 tonnes). For 2024, we’re estimating production to reach 250,000 tonnes – that’s very good news.”

The new record price of Rs 30,951 per tonne will benefit sugarcane farmers and producers, who will receive approximately Rs 36,126 per tonne after adding the revenue from bagasse and molasses.

The improved prices are expected to encourage further investment and innovation in the sector.

Source: Defi Media