Between January 2012 and March 2018, the average price of Guatemalan raw sugar exports has been falling, going from $0.58 to $0.34 per kilo.
Figures from the Information System on the Sugar Market in Guatemala, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Because of the drought that is affecting several areas in Central America, in El Salvador, agricultural producers estimate that at least 6.3 million hundredweight of corn, valued at $39 million, have been lost.
Representatives from the Salvadoran Chamber of Small and Medium Agricultural Producers (Campo) said that due to the drought, which lasted up to 40 days in some areas of the country, they have lost more than 6 million hundredweight of corn, valued at $38.6 million.
Entrepreneurs in the sector reported that for the 2017-2018 harvest the volume produced amounted to 11.6 million hundredweight, 2% more than what was registered in the previous harvest.
Representatives from the Association of Sugar Producers of Honduras (Apah) announced that between the harvests of 2016-2017 and 2017-2018, the country reported an increase of 200,000 hundredweight in the volume of production, going from 11.4 million to 11.6 million.
Businesses in the sector foresee a decline during the 2018-2019 harvest, attributed to the drought and the illegal invasion of lands resulting from the political crisis that Nicaragua is experiencing.
According to statistics from the National Committee of Sugar Producers (CNPA), during the last two harvests the country reported a sustained increase in its sugar production.
In El Salvador, businesses in the sector estimate that sugarcane production will fall due to the drought that is affecting different areas of the country and which has now been ongoing for 35 consecutive days.
Without agreeing on the estimated losses that the sugar sector will face, representatives from different business associations reported that the damage caused by the drought will be reflected in a reduction in production.
The FAO food price index registered an interannual decrease of close to 1%, due to weakening in most markets, as a result of tensions in international trade relations.
From the monthly FAO report:
The FAO Food Price Index* (FFPI) averaged 173.7 points in June 2018, down 2.4 points (1.3 percent) from its level in May, representing the first month-on month decline since the beginning of this year.
Plant diseases such as rust in coffee plantations, added to an oversupply of sugar worldwide, explain some of the moderate expectations that entrepreneurs have for some of the most important agricultural products in the region.
Representatives of the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Cacif) of Guatemala believe that the deceleration that has been registered in international prices of some raw materials and agro-industrial products suggest a decline in local production.
Business leaders from the sector declared that in the 2017/2018 harvest the country registered production of 1.1 million tons, a figure that has never been reached before.
At the beginning of the harvest, the Association of Sugar Producers of Honduras (APAH) estimated that during the cycle 1.20 million tons would be produced, however at the end of the harvest they only reached 1.16 million tons.
The FAO food price index grew 1.9% year-on-year, due to the increase in prices of dairy products and cereals.
From the monthly report on the FAO food price index:
The FAO Food Price Index* (FFPI) averaged 176.2 points in May 2018, up 2.2 points (1.2 percent) from April level and hitting its highest level since October 2017. The increase in May reflected a continued steep rise in dairy price quotations, while those of cereals also rose, albeit at a slower pace. By contrast, vegetable oil and sugar markets remained under downward pressure whereas meat values changed little.
Due to climate effects, the Honduran union expects that around 40,000 less tons of sugar will be produced in the current season.
On top of the climate situation is also the fact that the price of sugar has been falling, partly explained by the abundant crops reported in places such as India.The result of this is that production costs in countries such as Honduras are reducing competitiveness of the crop.
Over the past year sales made by countries in the region totaled $1.24 million, 22% more than the exports registered in 2016, this increase is in contrast to the declines reported in 2015 and 2016.
Figures from the information system on the Raw Sugar Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
In 2017, countries in the region imported $55 million worth of sugar and confectionery items from Mexico, 11% more than what was purchased in 2016.
Figures from the Information system on the Sugar and Confectionery Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
In the first nine months of 2017, countries in the region exported $1.166 billion worth of sugar, 41% more than was sold during the same period in 2016.
Figures from the information system on the Raw Sugar Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
In February, the FAO food price index fell by almost 3% in year-on-year terms, due to a drop in prices of sugar and vegetable oils.
From the monthly report on the FAO food price index:
The FAO food price indexstood in February 2018 at an average of 170.8 points, that is to say, 1.1% (or 1.8 points) more than in January, although it is still 2.7% less than its value in the same period last year. Higher international prices for dairy products and cereals contributed to the inter-monthly rise in the value of the index, while prices for sugar and vegetable oils declined and meat prices remained stable.
In 2017 exports totaled $5,760 million, 6% more than in 2017, and sales of clothing and sugar were the ones that accounted for most of the increase.
Sales in the Central American region, including Panama, constituted the second largest destination for Salvadoran exports, amounting to $2.403 billion, also registering an increase of 6% compared to 2016.