Sweet time for sugar firms

On April 13, the sugar price of US sugar futures contracts surpassed 24 US cents per pound, up nearly 20 per cent compared to mid-March, and over 30 per cent compared to early 2023.

In the UK, the price of refined sugar for May fetched $694 per tonne, setting an 11-year record.

In the domestic market, sugar prices rose slightly, hovering around 78 US cents per kilogram, owing to incurring pressure from imported sugar and amid a peak time for sugarcane pressing.

Several securities firms have forecast sugar prices in the domestic market to exceed 80 US cents per kilogram in the third quarter (Q3) this year.

The favourable market conditions have underpinned sugar firms’ performance in the year to date.

Quang Ngai Sugar JSC (QNS) unveiled that in Q1 this year, the company saw $96 million in total revenue, showing an over 18 per cent increase on-year, and equal to 26 per cent of the full-year plan.

Its pre-tax profit came to $15.6 million, soaring over 72 per cent on-year, and equal to just under 30 per cent of the full-year plan.

Mirae Asset Vietnam Securities have raised expectations for QNS this year, with a prediction of almost $40.2 million in total revenue and $58.4 million in post-tax profit, up 11.9 per cent and 4.6 per cent on-year respectively.

The upbeat prospects have given a boost to sugar companies on the stock market.

At Lam Son Sugar JSC (LSS) the company aims to earn over $94 million in revenue and $2.6 million in pre-tax profit this fiscal year, up 6 per cent and 20 per cent on-year respectively.

The company’s management unveiled plans for LSS to produce at least 450,000 tonnes of sugarcane this season through its further cooperation with large plantations and crafting strategy on sugarcane variety selection.

Meanwhile, LSS will keep a close eye on state policies on sugar production and the market situation at home and abroad. The company is also considering the possibility of opening a subsidiary in Laos or Cambodia.

The upbeat prospects have given a boost to sugar companies on the stock market.

QNS closed at $1.80 a share on April 21, up 17.5 per cent compared to early 2023. During the same period, LSS reached 43 US cents a share, surging over 40 per cent, Son La Sugar, with the ticker SLS, hit $7.40 a share, up 32.7 per cent.

According to the Vietnam Sugarcane and Sugar Association, the country is currently home to around 151,300 hectares of sugarcane production, a 3 per cent increase compared to the previous season.

While housing sales are declining, shopping malls are becoming increasingly crowded. Developers are ramping up the expansion due to the rising demand for retail and office spaces.

Despite a slight increase recently, the price of rubber latex is anticipated to hover in the low range going forward amid feeble demand due to a possible global economic recession.

While local sugarcane farmers have been taking a fair dent from the effects of the pandemic, regional competition fuelled by the commitments of the ASEAN Trade in Goods Agreement has further put pressure on them, leading to a daunting situation for the already declining sector. To protect local farmers from more harm and rejuvenate the domestic sugar industry, the prime minister has urged ministries and agencies to find solutions.