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Sharp Drop in World Molasses Output Fails to Spur Prices

Molasses prices around the world fail to be inspired by the sharp drop in world production forecast for 2018/19. 

In the Far East fob prices are currently in the low to mid-USD90 per tonne only little changed from the depressed levels seen 12 months earlier. In Russia values were around USD80 on an exw basis and in the EU prices hover around EUR135-145 depending on the location.

It has been repeatedly pointed out that molasses can easily be replaced by other substrates in most feed rations. As a result, it is being dropped from the formulas as soon as other ingredients are cheaper. Therefore it is not so much molasses supplies which determine the price but the price level for competing feed ingredients.

It is against this background that we present our quarterly update of the world sugar production estimate for 2018/19 on a local crop year basis. Our numbers indicate that global production in 2018/19 may fall by 4.5 mln tonnes to 65 mln. This would be a slightly smaller drop than the 5.5 mln tonne reduction assumed in November. This is due to an up-ward revision of the crop outlook in India and Brazil which more than offset some reductions elsewhere.

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Molasses prices around the world fail to be inspired by the sharp drop in world production forecast for 2018/19.

Click below to get more information about current trends as well as the global comparative for molasses production and how this could further effect sugar production.  

Sugarcane Ethanol Production Brasil

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