Lower cane crop in Brazil would support sugar prices: Bank of America Global Research
Bank of America Global Research predicts firm prices for raw sugar due to global supply shortages. Brazil, the largest sugar producer, is seeing reduced sugarcane crushing caused by dry weather and wildfires, particularly in São Paulo. The 2025/26 season could also face challenges, leading to lower yields. Despite overestimated forecasts, the global sugar surplus is expected to be just 650,000 metric tons. This situation may push prices to 21-22 cents per pound, up from the current 18.83 cents.
New York : The prices of benchmark raw sugar in New York are likely to stay firm and could gain ground, based on a global lack of the sweetener, according to a note published by Bank of America Global Research on Monday, reported Reuters.
As per media report, analysts at the bank said the sugarcane crushing in Brazil, the world’s largest sugar producer and exporter, is falling short of expectations because of dry weather conditions and recent wildfires in São Paulo state.
“There is also a risk to cane crushing volumes in Brazil for the 2025/26 season, as a potentially drier inter-harvest period and the damage caused by wildfires may impact crop yields, particularly in renewal areas,” the bank stated, adding that most forecasts for Brazil’s sugar output are “overestimated.”
Bank of America sees the world having only a 650,000 metric ton sugar surplus, which would translate to a stocks-to-use ratio of 54.1%. These supply-and-demand dynamics should push prices into the range of 21 to 22 cents per pound. On Monday, sugar trading on ICE closed out at 18.83 cents per pound, the lowest level in two weeks.
Source Link : https://www.chinimandi.com/lower-cane-crop-in-brazil-would-support-sugar-prices-bank-of-america-global-research/
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