El Salvador sugar exports command highest prices in 14 years

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By LatAm Reports Editor

In January alone, sugar exports climbed to the top spot as the best-selling product by El Salvador with a growth of 85.

The kilogram of Salvadoran sugar is exported at its highest price in at least 14 years, according to the Central Reserve Bank (BCR). However, the improvement does not sweeten producers, who regret that crop costs are still above pre-conflict values in Ukraine.

The future price of sugar on the world market was at its best in 12 years last October due to a lower harvest in producing countries – such as Brazil facing a severe drought – which fears a deeper shortage as in recent years there has been a supply deficit.

According to the BCR, the average price of the kilogram of sugar exported was $0.61 in January 2024, a value not seen in 14 years.

Since 2010, the best price was recorded in 2012 when it was possible to sell the kilogram at $0.5301. In the next decade it remained between $0.3196 and $0.4725.

Sugar is the main export agricultural product and last January managed to climb to the top spot in the total basket, surpassing even the T-shirts that held the crown as the first export item of all the productive fabric.

In January alone, $60.80 million, an additional $27.9 million was exported to the $32.8 million reported in the same period of 2023 and equivalent to a growth of 85 percent.

In January 2023, the average price of kilogram was $0.5092, i.e. for the same month of 2024 it has grown by 22 %.
Producers don’t perceive rising.

Escar Orellana, president of the Association of Sugar Cane Producers of El Salvador (Procaña), explained that the increase in the international market does not move to thelocal cannons, those who still grow with expensive inputs.

There has been an improvement in the international market that is where 65% of our sugar goes, but, in how much if we have felt the benefits it is very little because agricultural inputs such as fertilizers, fuels and labor have risen, then the profit margin for the producer is almost the same even with previous prices, Orellana said.

El Salvador is an importer of agricultural inputs, which in 2023 exceeded $99.9 million,a figure that decreased by 43.1 % compared to 2022But it remains above the values reported prior to the Russian invasion of Ukraine when purchases were around $73.5 million in 2021.

The agricultural sector suffered a sharp rise in production costs in 2022 as Russia is one of the world’s largest suppliers of fertilizers, but with the conflict in Ukraine trades stopped and, in addition, the price of crude oil soared due to fear of a shortage.

Procaña indicated that inputs are still bought 25 per cent more expensive, but that in 2024 they have noticed some normalization.

The union leader expects the price of the quintal of sugar on the world market to remain, where it has ranged from $22 to $23.

This article has been translated from the original which first appeared in Dario El Mundo