DUBAI- The sugar prices will go down as more regional players are preparing to enter the market, says Jamal Al-Ghurair, founder and managing director of Al-Khaleej Sugar, the largest sugar refinery in the GCC region.
Talking to Saudi-based Arab News on the sidelines of the 10th Annual International Sugar Conference that opened in Dubai, he said: “The competition will be tough as Bahrain and Yemen are also going to open factories. Due to this competition, sugar prices will go down and producers’ will see shrinking margins.”
Moreover, he said the global sugar surplus will extend for a fourth year in 2014-15.
“Al-Khaleej Sugar, who distributes around 1.5 million tons to the international market each year, has already been facing tough competition from Saudi players for several years,” he said.
Around 650 key players from 45 countries have been attending the event.
They will discuss latest trends on global sugar market and share expertise and opinions of international speakers.
The official Sugar Conference, hosted by Al-Khaleej Sugar alongside Kingman-Platts, will run until Feb. 11.
“This conference is hosted every year so that we can establish a solid platform for the sugar industry and come together to share our thoughts, communicate key information and network with new key players in the market,” Jamal Al-Ghurair, managing director Al-Khaleej Sugar, said in his opening speech.
“When the sugar conference first started out 10 years ago myself and Jonathan Kingsman did not know how rapidly this platform would grow, today we are celebrating 10 successful years,” he said.
Jonathan Kingsman, director of agriculture in Kingmsan-Platts, said that in India the high cane price and low arrears (delay in cane payment) encouraged farmers to persevere with planting cane.
The revenue for producers has undeniably fallen but in Brazil, the world’s biggest sugar producer and exporter, the Real has weakened by almost 20 percent since the beginning of last year.
The event started off with a focus on Brazilian Prospects followed by talks on India, The World and an Outlook for Chinese Sugar Policies.
This years focus of the conference has been on the outlook of the sugar world and what we are expecting over the years including policies, reforms, trading opportunities, Supply chain outlook to methodology and physical premiums.
Discussions pointed that 2014 will be the fourth year in which global sugar stocks increase, with fundamentals still favoring buyers and a downward price bias, with ending stocks forecast to reach the equivalent of 23 weeks of supply (versus 17 weeks in 2010). Sugar prices are expected to decrease by roughly 10 percent more to a record level during this year.
Indian millers, meanwhile, hoped that an incentives package will stimulate mills to export raw sugar from substantial stocks to the world market.
Abinash Verma, head of the Indian Sugar Mills Association (ISMA), said he hoped Indian authorities would announce a sugar production incentives package to aid cash-strapped mills this week.
“The assistance has to come now and it will come this week,” Verma told at sugar conference.
The conference is being attended by industry stakeholders like commodities traders, banks, financial institutions, general sugar traders, buyers, F&B companies, refineries, sugar mills, analysts and marketers. – Courtsey- Arab News