- Central America exported 1.25m tonnes of raw sugar this year, down 300k tonnes from 2020.
- 50% of the region’s exports went in January and February.
- Things slowed down in May when South Korea, the key importer, turned to other suppliers in search of cheaper freight.
Strong Spreads Encouraged Early Raws Exports
A strong March/May spread encouraged Central America’s sugar producers to export earlier than they usually would this season.
- Between January and February, the region exported just shy of 600k tonnes of raw sugar – almost 50% of its seasonal total.
- The majority was shipped duty-free to South Korea from Nicaragua, El Salvador, Costa Rica, and Honduras.
- However, from May, South Korea made a less frequent appearance in the Centrals’ line-up; although Thai sugar was more expensive, high freight rates made Central American raws less competitive into the region.
- Most of the remaining sugar was delivered to the March expiry, with some going to the US in the summer months, as Central American producers have quota access.
- We think a further 95k tonnes will have shipped to the US under the re-export program; it allows for world market sugar to replace domestic supply exported in finished goods.
- With freight rates set to remain high for the foreseeable future, we’ll continue to monitor the situation to see how both South Korea and the Central American suppliers react.
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