An export ban on sugar imposed by major exporters Pakistan and India will have no impact on Vietnam's supply or prices, according to the Vietnam Sugarcane and Sugar Association (VSSA).
Pakistan’s Economic Coordination Committee (ECC) has approved to ban the export of sugar in order to stabilize domestic prices. The move came after the price surged to a record Rs170 ($2) per kg in the local market, Pakistan Today wrote.
The daily newspaper quoted sources as saying that the price of sugar in April 2023 started increasing, despite the fact that the country had a carry over stock of 1 million ton from the previous year and a bumper crop of sugarcane during 2022-2023.
The continuous increase in price of the essential commodity compelled Pakistan’s Ministry of National Food Security & Research (MNFSR) to fix the price of sugar. The Sugar Advisory Board in a meeting dated April 17, 2023 fixed the price at Rs98.82 ($1.2) per kg.
Pakistan Today said that the price is rising continuously causing stress to low income consumers and increasing food inflation. The Federal Board of Revenue (FBR) reported on August 15, 2023 that 2.27 million tons of sugar was left in stocks which would not meet domestic consumption requirements till the start of the next crushing season.
According to Statista, India was the world's third largest exporter in the 2022/2023 crop year with 6.5 million tons. Pakistan ranked seventh with 1 million ton.
India is expected to ban mills from exporting sugar in the next season beginning October, halting shipments for the first time in seven years. The information has caused concerns to the global market.
"The export bans imposed by Pakistan and India will have no impact on Vietnam's supply or prices," Nguyen Van Loc, chairman of the VSSA, told The Investor.
"The embargo on sugar exports by Pakistan and India may have an impact on the amount of sugar imported and exported globally. However, the global supply at this time is not low. The situation with India and Pakistan is comparable, in my opinion, to the saying 'without aunts, the market is still crowded'," he added.
According to Trading Economics, the current world sugar price is 25 cents/pound, up 31% compared to the beginning of the year. Unfavorable weather is believed to be the cause of the decline in supply in major markets such as Brazil, India, and China.
According to Loc, in addition to supply and demand, the price of sugar around the world is also influenced by things like inflation, currency value, commerce, and freight costs. As a result, compared to other considerations, the export bans imposed by Pakistan and India will have less of an effect on the global market.
In terms of the effect on the Vietnamese market, in 2022, India's sugar accounted for 0.2% of Vietnam's total imports of this item. The figure for Pakistan was significantly lower than that. The availability of sugar in Vietnam is currently adequate, and there are numerous sources, including legally imported sugar, sugar substitutes, indigenous production, and sugar trafficked from Cambodia and Laos. Therefore, the export bans imposed by Pakistan and India will have no impact on Vietnam's supply or prices.