Thailand is usually one of the world’s main molasses suppliers, but this season’s poor cane crop means it’s having to import to satisfy its ethanol demand.
This has put pressure on Indian supply, and prices are now on the rise.
Fortunately, we’re into spring in Europe, meaning demand from the feed markets should reduce, with animals back on pasture.

India’s Supply Tightens After Busy Q1

In our last update, we said India would supply over 1m tonnes of cane molasses to the world market. Between December 2020 and mid-April 2021, we’ve seen India export almost as much as that. This has resulted in supply becoming somewhat tighter in India, and prices have increased since the turn of the year as a result.

This period usually coincides with the peak period of animal feed demand in Europe, as animals are housed during the winter months. Now we’re into Spring in Europe we should see molasses demand reduce in the feed markets as animals are back out on pasture.

Asian demand has been robust so far in 2021, with Thai demand heightening in response to its extremely low cane crop, and with all mills shut in advance of the traditional Songkran closing date.

The beet molasses market has been driven by the sales campaign of the Egyptian sugar industry. Egypt will provide at least 300k tonnes of beet molasses to the export market; around 200k tonnes of this has now been committed for export between April and June this year. The average prices for export have been in line with expectations, reflecting the impact of slightly tighter stocks in the EU and Russia, due to the smaller beet crops in 2020/21 campaign.

Looking ahead, we’ll see the start of the Southern Hemisphere crops. In terms of molasses, the key suppliers will be Australia and Indonesia from May. As noted above, we’ve passed the winter peak of animal feed demand in Europe for molasses and are moving towards the quieter (in molasses terms) summer months. Egypt should also be quieter in the next few weeks as it’s successfully concluded its first round of export pricing.