The US is the world’s second-largest importer of molasses, importing around 1m tonnes each year.
However, its supply is tight at present because Central American cane crops were hit by hurricanes last season.
The vast majority of its molasses come from there, so it’s not benefitted from India’s continued exports.

India’s Supply Tightens After Busy Q1

Some of the important stories for 2021’s cane molasses market became clearer last month, and the plot lines are set for the next few months.

India has already exported 1m tonnes of molasses from this season’s cane crop.

Indonesian supply looks in line with expectations and should be sufficient. The case is the same for Australian cane molasses, meaning the Asian and Pacific markets should be well supplied until the 2021/22 crops start later this year.

Supply is tightening in North America and the Caribbean, however.

The final availability of current cane molasses crop in Central America is slightly below expectations too, due to a combination of the hurricane damage sustained last year and robust ethanol demand for molasses in the region. The supply situation has been exacerbated by stronger US molasses demand, due to the higher feed commodity prices. However, corn and wheat prices have fallen back slightly from the highs seen earlier this month.

The European market has been less constrained by supply due to the strong exports from India and demand has not picked up as much as in North America.

Into the second half of 2021, the market for cane molasses should tighten as the continent will be waiting for 2021/22 cane molasses crops, which won’t start to arrive until December. In the meantime, the market will have new-crop EU and Russian beet molasses from September, which will keep the molasses market supplied.

The beet molasses market is already looking ahead to the new crop, due to start in September.

It’s fair to say that it’s a mixed bag in terms of crop progress.

In France and Belgium, very cold weather in April will likely have a detrimental impact on production. Russian prospects look better and production should be higher than this season. The EU has had a fairly wet May and generally colder weather, but it’s not clear yet what impact this will have on the sugar beet crops.