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Sugar Prices Climb On The Outlook For Smaller Global Supplies

July NY world sugar #11 (SBN23) on Friday closed up +0.54 (+2.17%), and Aug London white sugar #5 (SWQ23) closed up +11.50 (+1.65%).

Sugar prices garnered support Friday from Thursday’s bi-annual report from the USDA that projected that 2023/24 global sugar ending stocks will fall to a 5-year low.

In Thursday’s bi-annual report, the USDA projects global 2023/24 sugar production will climb +6.0% y/y to a record 187.881 MMT and that global 2023/24 human sugar consumption will increase +2.3% y/y to a record 180.045 MMT.  The USDA is forecasting that 2023/24 global sugar ending stocks will fall -15.2% y/y to a 5-year low of 33.455 MMT.

Ramped-up Brazil sugar production is bearish for prices after Unica Thursday reported  Brazil’s 2023/24 sugar production through mid-May was up +48% y/y at 4.063 MMT and that the percentage of sugarcane crushed for sugar rose to 45.6% from 38.5% last year.

Last month, sugar prices rallied to 11-year highs on the outlook for tighter global supplies.  On Apr 26, the Indian Sugar Mills Association (ISMA) cut its 2022/23 India sugar production estimate to 32.8 MMT from a Jan estimate of 34 MMT.  India’s Food Secretary said India might not allow additional sugar exports this year due to lower-than-expected sugar production.  India has allowed only 6 MMT of sugar exports in 2022/23 after permitting 11.2 MMT in 2021/22, down -46% y/y.  The ISMA on Jan 31 cut its India 2022/23 sugar export estimate to 6.1 MMT from an Oct forecast of 9 MMT.  Also, the ISMA said that it sees India’s sugar mills diverting 4.5-5.0 MMT of sugar to ethanol production in 2022/23.  India is the world’s second-largest sugar producer.

Another supportive factor for sugar was Monday’s action by the International Sugar Organization (ISO) to cut its 2022/23 global sugar production and sugar surplus estimates.  The ISO cut its 2022/23 global sugar production estimate to 177.4 MMT from a previous estimate of 180.4 MMT and cut its 2022/23 global sugar surplus estimate to 852,000 MT from a previous estimate of 4.15 MMT.  ISO on May 4 forecasted a global 2023/24 sugar surplus of +2.1 MMT.

Sugar prices have support from changing weather patterns that could undercut global sugar production.  On May 11, the U.S. Climate Prediction Center raised the likelihood of an El Nino weather pattern emerging between August and October to 94% from the 74% forecast last month.  If that El Nino pattern occurs, it could bring heavy rains to Brazil and drought to India, negatively impacting sugar crop production.  The last time El Nino brought dryness to sugar crops in Asia was in 2015 and 2016, which caused prices to soar.

Larger sugar production in Brazil is expected after Conab on Apr 26 forecasted that Brazil’s 2023/24 sugar output would climb +4.7% y/y to 38.8 MMT, the second most ever, as crops recover from the previous season’s adverse weather.

The above news was originally posted on

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