Sugar market starts 2025 on a bearish note
Global sugar markets faced low activity in late 2024. Brazil’s Center-South region exceeded expectations, potentially reaching 620 Mt of cane in 2024/25, adding bearish pressure. India’s sugar production lags by 17.8%, while Thailand saw a 6% production boost. Harvest delays in Central America impacted output. A strong dollar and weak real continue to pressure global sugar prices.
In the last weeks of 2024, the sugar market saw low activity due to year-end celebrations, with prices remaining relatively stable throughout the last quarter.
According to Lívea Coda, Sugar and Ethanol Analyst at Hedgepoint Global Markets, “despite a challenging year with drought and fires, the central-south region of Brazil surprised with positive results, reinforcing bearish expectations, especially given the expected recovery in the northern hemisphere. As a result, prices fell to 19c/lb and struggled to recover.
The Center-South region has already crushed almost 603 Mt of cane, exceeding expectations. “We believe that the 24/25 harvest could reach 620 Mt of cane and 40 Mt of sugar, driven by good weather conditions, increasing optimism for 25/26 and putting downward pressure on sugar prices,” Lívea points out.
INDIA
In the Northern Hemisphere, Indian sugar production is 17.8% (1.7 million tonnes) behind schedule due to rains and end-of-year festivities such as Diwali. However, crushing in December was similar to the previous year, totaling 6.72 million tons compared to 6.88 million tons in 2023. The main difference was in November, which was 1.5 Mt lower, reflecting the delay.
“Although our forecast of 31 Mt is maintained, it is crucial to monitor the trend, taking into account factors such as disease and area reduction, even with favorable weather,” the analyst points out.
Thailand
In Thailand, above-average rainfall during sugarcane development favored the harvest. “Sugar production in the first 20 days increased by 6%, with the season starting 4 days earlier than 23/24 and reaching almost 1.4 million tons, in line with 22/23 figures,” she points out.
Central America
In Central America, harvest delays reduced production in Guatemala and El Salvador, contributing to a short-term growth outlook, but with expectations of recovery during the season compared to 23/24.
“Less than 500 kt of cane was crushed in Guatemala, compared to more than 2 Mt in the same period of the previous cycle. El Salvador produced 83 kt of sugar, compared to 136 kt last season,” he points out.
European availability limits white premium gains. At the macro level, a strong dollar and a weak real are encouraging Brazilian producers to lock in future harvests, putting pressure on sugar prices in the short term.
To read more about Sugar Industry continue reading Agriinsite.com
Source : Chinimandi
Recommended for you
Leave a Reply
Leave a Reply
