Sugar glut in Myanmar leads prices to 10-year low

A sugar glut in Myanmar has led prices to a 10-year low, as tonnes of sugar meant for export now remain in the country. There is too much sugar left in the market and the price can’t get any higher. Farmers have also started to reduce sugarcane acreage this year. According to the association’s estimates, there might be 150,000 tonnes to 200,000 tonnes of unwanted inventories in the country and prices are now between K840-K860 per viss, the lowest in over a decade. On the domestic front, “consumption has fallen drastically as there are no festivals or events during COVID-19. With people spending less, there is an impact on the sugar-rice snacks and beverage markets which in turn is having repercussions on the sugar market.

Overseas demand had fallen too. Earlier this year, Greece called off an offer to buy sugar from Myanmar at US$400 per tonne per month on a free on board system. But the future looks bleak for the sugar market. Despite lower sugarcane acreage, traders are predicting sugar prices will continue to drop in the coming months as a result of the glut and lower local consumption. There is now less than 50,000 acres of sugarcane fields in Myanmar and this is down from about 460,000 acre of sugarcane plantation before. Sesame and different types of paes are being planted instead of sugarcane.

In fact, sugar prices had already been on their way down since last year, and some 4500 sugarcane farmers from Sagaing, Mandalay and Shan State had submitted a report to the President to make their situation known. With domestic inventories piling up, the farmers also asked for a limit on sugar imports from aboard. The drop in demand and reduced sugarcane acreage has also impacted sugar mill operators further along the value chain.

Source: Myanmar Times

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