Weekly Market Outlook 1st - 7th July 2024

Weekly Market Outlook 1st - 7th July 2024

Last week, wholesale sugar prices remained stable across major cities in Tanzania, Djibouti, South Sudan, Somalia, and Rwanda. In Kenya, there were slight price fluctuations following the end of the duty-free World Market brown sugar import window. With no new imported cargoes arriving at Mombasa, the market strengthened by about USD 6 per ton, while Nairobi saw an average wholesale sugar price drop of USD 9 per ton. In South Africa, despite stable sugar prices in local currency, the stronger rand led to a USD 13 rise in USD-based wholesale sugar prices.

The EAC and World Market for VHP/Refined sugar are currently closed, and import parities indicate potential negative returns. COMESA FTA/NON-FTA did not report any sugar contract offers.

Vessel SJ Lily arrived at Dar es Salaam Port in Tanzania from Kandla, India, last week, carrying 8,120 tons of re-bagged Brazilian VHP sugar.

Tanzania: The government has amended the Sugar Industry Act to address shortages. The National Food Reserve Agency (NFRA) now has exclusive rights to import, store, and distribute sugar for domestic consumption, only importing in case of local market deficits. The Sugar Board of Tanzania (SBT) will issue import licenses based on local production and require producers to disclose production costs and publish distributor names at the start of each milling season.

Egypt: The government has extended the sugar export ban for three more months to ensure sufficient domestic supply. Exports are only allowed for quantities exceeding local needs. This extension is effective from July 01, 2024. The export ban has been in place since Q1 2023 due to severe shortages, with sugar prices reaching historic highs. The government sanctioned the importation of one million tons of sugar to address the shortfall, with 750,000 tons already received by June 02, 2024, stabilizing prices.

Overall, wholesale sugar prices were stable in most Eastern and Southern African markets, with Mombasa and Nairobi experiencing minimal fluctuations. Potential negative import parities were noted across all market sources. The lapse of the World Market import window has led to near-zero port activities for the Kenyan market from major world sources.

Source: kulea.com

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