Agencies-Gaza post
The global food crisis may extend from grains to sugar
Sugar prices are expected to skyrocket due to export restrictions imposed by a number of major producing nations trying to tame soaring domestic food prices.
Seriously undermining global supply chains, the impact of the Covid-19 pandemic has been dramatically exacerbated by the crisis in Ukraine and subsequent sanctions against Russia. The conflict between the two major grain exporters has disrupted global supplies.
A number of countries have moved to limit exports of other key commodities, threatening global food security while risking further increases in agricultural commodity prices.
Kazakhstan began a six-month export ban on white and cane sugar on Monday. India is reportedly considering restrictions on sugar exports for the first time in six years to prevent domestic prices from rising. India’s ban is expected to affect around 10 million tonnes of this season’s exports.
Last week Reuters reported that sugar cane mills in Brazil, the world’s largest producer and exporter of sugar, were terminating sugar export contracts and switching production to ethanol to take advantage of high energy prices. The estimated cancellations could equal up to 400,000 tonnes of raw sugar.
Earlier this month, Pakistan imposed a total ban on sugar exports, citing deep concerns about inflation. In March, Russia banned sugar exports until the end of August.
“With sugar, it’s relatively easy for Brazilian mills to switch production to ethanol production when it makes economic sense, and this can boost global sugar markets.” Darin Friedrichs, founder and head of market research at Sitonia Consulting, a Shanghai-based commodity analysis firm, told the South China Morning Post.
“Particularly with both food and energy prices rising, there is an increased focus on using food to make fuel,” he added.
Earlier this week, the head of the IMF, Kristalina Georgieva, warned that the world economy is facing “its greatest test since the Second World War.” UN Secretary-General Antonio Guterres said the scale of global hunger “is at a new high” The number of people affected by severe food insecurity has doubled in just two years, from 135 million before the pandemic to 276 million today.
However, Dong Xiaoqiang, commercial director of AB Sugar China, said he does not expect a global sugar shortage this year despite mounting concerns, adding that India and Thailand, the world’s second-biggest sugar producer and second-biggest exporter respectively, are expected to do so Increase sugar production in 2022.
“What has happened lately is more of a demonstration of emotional tension over the supply of food, including sugar,” Dong told the media. “Most of the countries that have announced export bans are small sugar producers with a tight balance between supply and demand, and in Brazil, not many contracts have been canceled,” he said while adding that prices are likely to rise.
