Myanmar To Forge Ahead With High Benefit From Global Sugar Market

U Thi Ha Tun, Myanmar Secretary of Sugar and Cane Related Products Association revealed that the price of new sugar produced is expected to rise as local stockpiles are running low, and imported sugar is remained less. It is obviously seen that sugar price has surprisingly risen this year in the international market, and the domestic sugar market also sees a potential. Currently, there are more than 4 million acres of sugarcane plantations and the mills forecast purchasing about 4.2 million tonnes of sugarcane this season, as global demand for sugar is rising.

This represents a change in trends, as Myanmar had been struggling for years with a domestic sugar glut prior to the surge in demand. In fact, due to unattractive duties and onerous customs requirements, sugar exports to China had ground to a halt earlier in 2020. Meanwhile, local sugarcane farmers had also been winding down production over the years as costs had become unviable.

“It was worth growing sugarcane in the last four years because prices were K50,000 per tonne and labour costs were lower,” U Win Htay said. Local sugar mills are only able to compete if sugarcane is purchased at K45,000 or less per tonne.

Sugar millers purchased sugarcanes in mid-December, and the mills are operating to produce sugar by the 2020-2021 sugarcane season. At present, the sugar mills in eastern and western Bago Region are running. The mills in northern and southern Shan State and Sagaing Region are soon to operate.

“Myanmar can export locally produced sugar to China and Viet Nam. As the supply is deficient, the price will rise on the growing demand for sure,” vice-chairman U Win Htay of the association guessed. Sugarcane covered 438,420 acres in the country this year. Myanmar’s sugar mills intend to grind 4.2 million tonnes of sugarcanes in the 2020-2021 sugarcane season, the Agriculture Department stated.

Prior to this, Myanmar exported raw, unrefined sugar, which is produced from sugarcane, to China. But due to import restrictions and a clampdown on illegal trade, fariners have gradually stopped growing as much sugarcane. In fact, insiders had forecast a shrinking of sugarcane plantations in fiscal 2020-21 to just over 350,000 acres, a decline of 25pc compared to seven years ago, and a record low for the industry, according to the association.

Meanwhile, Myanmar imports refined sugar, as only two out of the 29 sugar factories in Myanmar produces refined sugar. In fiscal 2019-20, Myanmar imported more than 57,000 tonnes of refined sugar, which is around 40-50 percent less than before due to rising prices and government-imposed restrictions.

To revive the local sugar market, Myanmar should invest in upgrading local factories and getting access to higher quality sugarcane seeds. Currently, local food and beverage businesses are permitted to import refined sugar for their needs and the coutnry imports some 10,000 tonnes of refined sugar from Thailand alone.

But these policies can, and should change. “If the demand is for refined sugar, the government should set new policies to upgrade at least two local factories to enable them to process refined sugar. If local businesses require refined sugar, they can contract with these factories for supply. This will help the local sugar industry to add value and reduce reliance on imports,” U Win Htay said.