Analysis Sugar
Sugar prices tend upwards, trend is downward
The sugar prices on the ICE of New York and London have been trending upwards in the past week. However, compared to three weeks ago, the price is actually decreasing.
New York closed yesterday (December 9) at $555 per ton, higher than a week ago. The same was true for London, where sugar closed at $473.99 per ton. However, compared to November 18 ($573.50 London, $489.43 New York), there has been a decrease.
Smaller sugar deficit increases pressure on prices
What increases the pressure on sugar prices is a smaller sugar deficit. According to the latest quarterly forecast of the International Sugar Organization ISO, published in November, the global sugar deficit for 2024/25 is smaller than previously expected. The deficit is estimated at 2.513 million tons of sugar, while in August it was projected to be 3.58 million tons. In the latest quarterly report, the ISO reports a global production of 179.069 million tons and a consumption of 181.582 million tons.
In addition, the sugar index of the Food and Agriculture Organization FAO also decreased in November, as revealed on Friday. The index is now at 126.4 points, a decrease of 2.4% month-on-month and 21.7% year-on-year. One of the factors is the start of the processing season in India and Thailand. Looking at Brazil, rainfall in November has made harvesting in the country more difficult, but at the same time has provided moisture in the soil. The FAO points to the weaker Brazilian real against the US dollar and lower prices for crude oil, which have ultimately led to a decrease in global sugar prices.
Rainfall in November doesn't help Brazilian harvest
The fact that rainfall in November hindered harvesting in Brazil was also evident from data from Brazil's Unica. In the first two weeks of November, 52.8% less sugarcane was processed in the main production region, amounting to 16.46 million tons compared to the same period last year. This means that processing is 2.2% below the level of a year earlier since the beginning of the season. Sugar production was also 59.2% lower in the first half of November, totaling 898,000 tons. This brings the sugar production from the start of this season to 38.274 million tons, which is 3% lower than the same period last year.
Alex Jurvillier
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