Global sugar stocks may hit 6-year low by early 2025 due to Brazil drought
Global sugar stocks are expected to reach a six-year low by early 2025, primarily due to drought conditions in Brazil, the top sugar exporter. The dry weather has hampered sugar-cane production, delaying next year’s harvest. Concerns over production issues and plant diseases have kept prices high, with Brazil projected to supply nearly 75% of the world’s raw sugar trade.
Global sugar stocks are projected to hit a six-year low by early 2025 due to drought conditions affecting Brazil, the world’s leading sugar exporter, according to commodities trading firm Czarnikow Group Ltd.
The prolonged dry weather has weakened the sugar-cane crop, reducing sugar production in the final months of the current season and potentially delaying the start of next year’s harvest, noted Pedro Mizutani, Czarnikow’s head of raw sugar trading.
Ongoing concerns over production issues in Brazil, increased by the spread of plant disease, have kept sugar prices elevated above historical averages for several years, highlighting the global reliance on Brazilian supplies. The country is anticipated to account for nearly 75 per cent of the world’s raw sugar trade this year, as per data from consultancy Datagro.
Harvesting in Brazil’s key sugar-producing regions is expected to begin in the second half of April, a few weeks later than usual, according to Mizutani. The premium for March sugar deliveries compared to May supplies has risen since September, reflecting a supply squeeze.
While Brazilian production is set to decline, the impact may be mitigated by reduced demand and a larger crop in China, said Luiz Silvestre Coelho, chief trader at Sucres et Denrees SA in Brazil. Supply is still expected to be ‘very tight’ in the first quarter of 2025.
India extends sugar export ban
Last month, India extended its ban on sugar exports for a second consecutive year, as the nation, the largest consumer of sugar globally, faces the possibility of lower sugarcane output.
Additionally, the government intends to raise the price at which oil companies purchase ethanol from sugar mills to increase biofuel supplies.
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