Analysis Sugar
Pressure on sugar prices continues
The sugar prices continue to move lower. The European Commission has published an expectation for European production, showing a significantly higher expected production. Next to that, expected production in Brazil is set lower.
In comparison with the same day a month ago, sugar prices on the ICE exchange in New York and London are moving down. Yesterday, New York quoted $489.34 per ton, London quoted $569.60 per ton.
Consultant Datagro expects that Brazilian sugar production in the central-southern region will decrease by 8.8% in 2024/25, to a quantity of 38.7 million tons. Due to lower availability in sugarcane, production is expected to decline significantly, fueled by drought and fires in the past year. Sugarcane processing is expected to decrease by 9.4% to 593.01 million tons, as reported by Sugaronline. There is also some positive news from Brazil, as Brazilian Climatempo reported earlier about rainfall in the upcoming period. However, this reinforces the negative sentiment in the market.
In the second half of September, Brazilian sugar production was 16.2% lower compared to last year (2.829 million tons). Overall, Brazilian production since the start of the season was 1.5% higher (33.154 million tons), but that difference has been decreasing. New data will be published soon, covering the first half of October.
European cultivation
In the latest 'short term outlook' from the European Commission, the expectation was given of growing sugar production in Europe. For 2024/25, it is expected that production will increase by 6% compared to the year 2023/24, reaching 16.6 million tons. This is 7% above the average of the past five years, attributed to a larger area of sugar beets.
Alex Jurvillier
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