After wheat, the world may face a new food crisis

On May 23, Kazakhstan began banning the export of white sugar and cane for six months. Meanwhile, India is said to be considering imposing restrictions on sugar exports for the first time in six years to prevent domestic sugar prices from rising. India’s ban is expected to target around 10 million tonnes of exports this season.

Last week, Reuters reported that sugar mills in Brazil – the world’s largest sugar producer and exporter – have canceled sugar export contracts and shifted production to ethanol in an attempt to take advantage of high energy prices. These contracts could be equivalent to 400,000 tons of raw sugar.

In addition, earlier this month, Pakistan imposed a complete ban on sugar exports, due to deep concerns about inflation. Previously, Russia banned sugar exports from March until the end of August.

Darin Friedrichs, founder and director of market research at Sitonia Consulting, an analytics firm based in Shanghai, China says: “It is relatively easy for Brazilian mills to switch sugar production to ethanol if the economic conditions are right. In particular, as both food and energy prices rise, more focus is on using food to produce fuel.”

The impact of the COVID-19 pandemic, which has severely slowed global supply chains, is significantly exacerbated by the crisis in Ukraine and the sanctions imposed on Russia. The conflict between the two major grain exporters has disrupted supplies, and some countries have moved to restrict exports of other key commodities, putting global food security at risk and at the same time endangering food security. increase the price of agricultural products.

Earlier this week, the head of the International Monetary Fund, Kristalina Georgieva, warned that the global economy was facing “the greatest test since the Second World War”. United Nations Secretary-General Antonio Guterres said the risk of hunger globally “is at a new high” – the number of people facing severe food insecurity has doubled in just two years, from 135 million before the pandemic to 276 million.

However, Dong Xiaoqiang, commercial director of AB Sugar China, said that it is not to the extent of a global sugar shortage this year. He added that India – the world’s second largest sugar producer and Thailand – the world’s number two sugar exporter, is expected to increase sugar production by 2022.

Mr. Dong told the press: “What has happened recently represents stress and anxiety over the food supply including sugar. Most of the countries that announced the export ban are small sugar producers with a tight supply-demand balance, but in Brazil not many contracts have been cancelled. He still expects sugar prices to rise.