Sugarcane prices increase at the beginning of the crushing season.

At this point, many sugar factories have entered the 2016/2017 production season. It is worth noting that the sugarcane prices at the beginning of the season that the factories are applying are much higher than the same period last year.

According to the Vietnam Sugarcane and Sugarcane Association, due to unusual weather and flood conditions in the Mekong Delta, many factories started their crop late in the 2016/2017 crop year. Some factories started their crop on schedule but could not operate continuously as planned.

Up to this point, most sugar factories in the Mekong Delta have entered the crushing season, only Tra Vinh sugar factory will enter the season in early December.

The sugarcane prices that sugar factories are purchasing are all at quite good levels. In the Mekong Delta, factories in Phung Hiep, Vi Thanh, Ben Tre and Soc Trang are buying sugarcane at the field price of 1,040 VND/kg (10 CCS).

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In the Southeast, the sugarcane purchase price at the field that Nuoc Trong Sugar Factory is applying is 1,000 VND/kg. Compared to the beginning of the 2015/2016 crop year, the sugarcane price at the beginning of the 2016/2017 crop year in the Mekong Delta is about 80 - 90 VND/kg higher. And if compared to the sugarcane price in the whole 2015/2016 crop year which was 950 - 1,050 VND/kg, the sugarcane price at the beginning of the 2016/2017 crop year is approximately equal to the highest price of the whole previous crop year.

The high sugarcane purchase price is due to the good sugar price. If in November 2015, the wholesale price of white sugar was around 14,000 - 15,000 VND/kg, then the wholesale price of white sugar in mid-November 2016 was around 17,000 VND/kg.

High domestic sugar prices have a significant impact on the world sugar market. White sugar prices traded on the London market are currently above 500 USD/ton. The latest forecasts suggest that the sugar deficit in the 2016/2017 crop year will not be as severe as previously forecast.

Specifically, according to Datagro's forecast, the global sugar deficit for the 2016/2017 crop year will decrease from 8.62 million tons to 6.48 million tons. This scenario is based on the forecast that sugar production in Central-South Brazil will increase after the production season begins in April. However, with a deficit of up to 6.48 million tons as forecast above, the world sugar transaction price is likely to remain high throughout this crop year.

Therefore, domestic sugar prices are expected to remain high in the coming months. According to Mr. Nguyen Hai, General Secretary of the Vietnam Sugarcane and Sugar Association, domestic sugar prices in the coming time are likely to not be lower than they are now.

If so, the purchase price of sugarcane at the field of farmers in the Mekong Delta will still be maintained at over 1,000 VND/kg. This is a price that ensures benefits for both farmers and factories. And most likely, the price of sugarcane in the 2016/2017 crop year will be higher than that of the 2015/2016 crop year.

Regarding output, due to the fact that the number of factories that have entered the season is not yet large, the sugar output at the beginning of the 2016/2017 crop year is still quite modest.

As of November 18, the factories had only pressed 475,130 tons of sugarcane, producing 39,307 tons of sugar. The total amount of sugar in stock at the factories as of November 18 was 132,936 tons, and the amount of sugar in stock at trading companies was 6,377 tons. The Sugarcane Association affirmed that with the above inventory, combined with the amount of sugar produced in the last months of the year, it will be enough to meet domestic demand during the 2017 Lunar New Year.

According to Tran Thanh/nongnghiep