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Headlines
- Brazil's Sugar Output Surges
- Global Sugar Supply Rises
- Impact of Brazil's Sugar Growth
October NY world sugar #11 (SBV24) is down -0.19 (-0.97%), while October London ICE white sugar #5 (SWV24) is down -6.20 (-1.14%) today. The decline in sugar prices is largely due to an increase in Brazil's sugar production. According to Unica, Brazil's Center-South sugar production for the 2024/25 marketing year, through mid-August, has risen by +5.4% year-over-year to 23.91 MMT.
Earlier this week, consumer stocks saw sugar prices reach 1-1/4 month highs following reports of widespread fires in Brazil. The fires, caused by drought and extreme heat, have severely impacted sugar crops in Sao Paulo, the country’s leading sugar-producing state. Orplana, a sugar cane industry group, reported that over the past weekend, up to 2,000 fire outbreaks affected around 80,000 hectares of planted sugarcane in Sao Paulo. Green Pool Commodity Specialists estimate that these fires could result in the loss of up to 5 MMT of sugar cane.
The rise in sugar prices was also influenced by Conab, Brazil's government crop forecasting agency, which reduced its 2024/25 Brazil Center-South sugar production estimate to 42 MMT from a previous forecast of 42.7 MMT. The revision was made due to lower sugarcane yields, a consequence of the ongoing drought and excessive heat.
On the global front, optimism about a strong sugar crop in India is exerting downward pressure on prices. The Indian Meteorological Department reported that as of August 19, India had received 632.5 mm of rain during the current monsoon season, which is 3% higher than the long-term average. India's sugar reserves for 2023/24 are estimated at 9.1 MMT, with a surplus of 3.6 MMT. The Indian government has restricted sugar exports since October 2023 to maintain adequate domestic supplies and support ethanol production. For the 2022/23 season, India allowed only 6.1 MMT of sugar exports, down from a record 11.1 MMT the previous season.
Meanwhile, in Thailand, record heat is raising concerns about potential damage to the country's sugarcane crops. The Thai Meteorological Department reported that more than three dozen of Thailand's 77 provinces experienced record-high temperatures in April. However, the Thai government has estimated that the country's 2023/24 sugar production from Dec-Apr 17 reached 8.77 MMT, surpassing earlier estimates. Thailand remains a significant player in the global sugar market as the world’s third-largest producer and second-largest exporter.
