Sugar prices hit fresh peak in domestic market

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Bags of sugar are seen for being delivered to markets.

The price of sugar spiked at the end of February and hit a new peak of K3,080 per viss in the wholesale market, Ko Kyaw Tun, a trader who sends the goods to the regions outside Yangon, told the Global New Light of Myanmar (GNLM). The prices soared to K2,370 from K2,260 per viss on 7 September 2022, showing an increase of K800 per viss.
The sugar price is moving up in the domestic market. Although new sugar was entering the market when the sugar cane crushing mills ran into full operation in late 2022, the price kept rocketing.
There are about 20 sugar mills in the country, with a production capacity of 500,000 tonnes per year. The domestic consumption is about 450,000 tonnes.
The remaining sugar is shipped to external markets. Myanmar conveyed 40,000 tonnes of sugar to Viet Nam in 2022. This year, sugar is expected to fetch US$600 per dollar. The domestic sugar price is too high compared with the export price.
The Trade Department under the Ministry of Commerce notified on 23 February that 65 per cent of income from rice export through the border area has to be exchanged at the reference rate (K2,100) set by the Central Bank of Myanmar.
Earlier, exporters were allowed to use the whole export income (foreign currency) and did not need to convert them into Kyat at the CBM’s reference rate.
This action will come into force for all rice and rice product exports starting from 1 March 2023 to affect export items equally, the Trade Department notified.
The traders keep the stocks in hand. The price is, therefore, going up. Sugar is not an essential good as it can be substituted with jaggery and artificial sweeteners. Sugar substitutes are mostly used in beverage businesses. Yet, artificial sweeteners are harmful, said a consumer.
In 2010, there were many sugar mills on a small scale. When they were forced to relocate to the industrial zone, most of them were suspended, said a businessman.
New sugar mills are found in the sugarcane sowing areas. So, the number of suppliers of sugar syrup along the Ayeyawady and Chindwin rivers decreased. When the sugar was priced below K1,000 per viss, the sugarcane price was around K40,000 per tonne. When the sugar price hit a record high of K2,500 in late 2022, the sugarcane was offered at K90,000 per tonne at the end of the sugarcane season. The prevailing price of sugar is around K3,000 per viss. As a result of this, the sugar buying price should increase, said a sugarcane grower.
The sugarcane growers in the Myanmar and China border received a profit of K100,000 per tonne for exports after deducting the transport cost.
In 2022, the commodities prices inflated and out of kitchen groceries (rice, edible oil, onion, chilli pepper and sugar), the prices of sugar and low-grade rice showed a tremendous increase than the previous record, a market observer said. – TWA/EM

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