The drought has forced a prematurely end to the crushing season, which already experienced in the past fortnights performance drops of 42% compared to last year.
Zafranet.com reports that "... Sugar production in Brazil, the world's largest exporter of the raw material, is slowing rapidly due to a drought this year which will provoke an early end to the milling season in the coming weeks, said the Union of Sugarcane Industry in Brazil, Unica, on Tuesday. "
Industrialists are warning that the 2013-2014 harvest losses could exceed current projections of 600 million hundredweight.
The reduction in purchase volume in the north of the country has caused alarm in the industry which believes that the product is coming in through the border with Guatemala and being sold mainly in Cortés and Santa Barbara.
Estimates are that the future prices of sugarcane will increase by up to 13% due to drought in Brazil, which in 2013 accounted for 28% of global production of the grain.
A shortfall in global sugarproduction and consequently higher grain prices is what is seen in the medium term in the global agricultural market. The effects of climate on sugarcane crops in Brazil have resulted in a decline in the production of the world's largest producer.
With the reduction in harvests in Mexico and India, sugar production could decline for the first time since 2009.
World production of sugarcane could decrease by 51% during the 2013-14 season compared to the 2012-13 period, as a result of the decline in prices caused by a fall in production in Mexico and India, according to researchers at Kingsman SA.
Central American producers will benefit from an increase in export quotas to the northern country.
The damage caused by drought to sugar cane in Mexico, a leading provider to the U.S., has meant a reduction in supply by 200 thousand metric tons, therefore, according to an analysis published by The Wall Street Journal- import quotas assigned to Central American countries will be increased in order to meet domestic demand.
Mexico needs to import another 150,000 tonnes of sugar in order to meet domestic consumption from October 2011, due to local crops having been seriously affected by drought.
The Mexican Ministry of Economy announced in a statement last week the government's intention "to open a new quota to ensure supply in the first three months of the cycle, which starts in October this year and ends in September 2012. "
Frosts in Florida in 2010 affected harvests and have led to a shortage that the US department of agriculture (USDA) states it will meet by increasing imports.
An article on ElSalvador.com reports that, "the USDA annual sugar imports program increased purchases to 1.41 million tons in 2011 as a result of reassigning almost 295,000 tons away from domestic growers".
A ton of refined sugar could cost as much as $600 in the next months, while unrefined sugar could be priced up to $0.23 per pound.
ISO, the International Sugar Organization, expects a shortage of 9.4 million tons for the 2009/10 cycle. This drop in production, triggered by climate change, has caused instability in the market, and this situation won't be solved in the short term.
As part of the Agritrade Platform, Guatemala will participate for the 27th time in PMA Fresh Summit, the most important international trade show and convention of fruits and vegetables in the United States, which will take place at Anaheim Convention Center, California from October 17th to 19th.
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