In recent months, the UAE has witnessed a significant rise in sugar prices, with an increase of up to eight percent, largely due to a global surge. However, relief is on the horizon as India is poised to resume sugar exports, potentially driving down prices in the UAE market.
This development follows the establishment of the National Cooperative for Exports Ltd (NCEL) in India, a body aimed at assisting cooperative societies in reaching international markets and adhering to global standards in production and manufacturing.
Previously, India had imposed a ban on sugar exports to maintain local price stability, exempting only the European Union and the United States. The new NCEL mechanism streamlines the export process by eliminating middlemen and facilitating direct transactions between the government and farmers. The UAE is expected to be added to the list of countries benefitting from this arrangement.
Dr. Dhananjay Datar, chairman and managing director of Al Adil Trading, noted the recent price hike in local markets, mainly due to imports from Brazil. He expressed optimism that the arrival of Indian sugar would lead to a decrease in local prices.
The global sugar market has been strained, with prices reaching their highest point since 2011. Factors include reduced supplies due to droughts in major exporting countries like India and Thailand, and a forecasted 2% drop in global sugar production for 2023-24 by the UN Food and Agriculture Organization.
Kamal Vachani, group director and partner at Al Maya Group, remarked on the UAE’s traditional reliance on imports from Brazil, India, Thailand, and parts of Europe. Vachani highlighted alternative sources like Mexico, Australia, and some African nations as potential suppliers amidst the current global pricing scenario.
The UAE remains in a comfortable position regarding its sugar stock, with options to explore additional markets like Thailand and Germany for imports, as suggested by Dr. Datar.