Sugar Prices Pressured by Weakness in Crude Oil
On Monday, sugar prices fell to a 3-week low due to increased sugar production in Brazil, the world’s largest producer. Unica reported Brazil’s 2024/25 crop year sugar output up 15.7% y/y at 14.2 MMT, with 48.72% of the cane crop crushed for sugar. Additionally, India’s 2023/24 sugar reserves at 9.1 MMT and a surplus of 3.6 MMT pressured prices, as the Indian Sugar and Bio-energy Manufacturers Association urged the government to allow increased sugar exports.
On Monday, sugar prices fell to a 3-week low on robust sugar output in Brazil, the world’s largest producer. Last Thursday, Unica reported that Brazil’s sugar production for the 2024/25 crop year through June was up +15.7% y/y at 14.2 MMT. Also, the percentage of Brazil’s 2024/25 sugar cane crop crushed for sugar rose to 48.72% from 47.69% last year.
Sugar prices are also under pressure after the Indian Sugar and Bio-energy Manufacturers Association (ISM) on July 3 reported India’s 2023/24 sugar reserves at 9.1 MMT and reported a surplus of 3.6 MMT. The group also urged the government to allow increased exports of surplus sugar. India has restricted sugar exports since October 2023 to maintain adequate domestic supplies. India allowed mills to export only 6.1 MMT of sugar during the 2022/23 season to September 30 after allowing exports of a record 11.1 MMT in the previous season. Separately, the Indian Sugar and Bioenergy Manufacturers Association reported on May 13 that India’s 2023/24 sugar production from Oct-Apr fell -1.6% y/y to 31.4 MMT
Below-normal monsoon rain in India, the world’s second-largest sugar producer, supports sugar prices. The Indian Meteorological Department reported Monday that India received 287.7 mm of rain during the current monsoon season as of July 15, down -2% from the comparable long-term average of 294.2 mm.
Record heat in Thailand that may damage the country’s sugarcane crops is bullish for sugar prices. On May 6, Thailand’s Meteorological Department said that more than three dozen of Thailand’s 77 provinces posted record-high temperatures in April, with new highs beating records as far back as 1958. Sugar millers in Thailand are reporting the lowest yield from crushed cane this year in at least 13 years. However, Thailand’s government on April 22 estimated that Thailand’s 2023/24 sugar production from Dec-Apr 17 was 8.77 MMT, above a Feb estimate from the Thai Sugar Millers Corp for sugar production of 7.5 MMT. Thailand is the world’s third-largest sugar producer and the second-largest sugar exporter.
Source Link : https://www.msn.com/en-us/money/markets/sugar-prices-pressured-by-weakness-in-crude-oil/ar-BB1q5T58
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