Analysis Sugar
Sharp rise in sugar prices slows down
The sugar prices seemed to continue their upward surge, but corrected slightly lower at the end of last week, limiting the increase. New data on Brazilian production has also been released. Market participants are revising their production expectations downward.
Sugar was quoted at $499.79 per ton in New York last Monday and $577.50 per ton in London. Prices have been moving more strongly upward, especially since mid-September. Since then, the sugar price on the ICE exchange in New York has risen by over 22% and in London by over 11%.
Another party is joining those who have recently seen a more pessimistic production outlook for Brazil. The sugar production expectation for the main production region was also revised downward by Hedgepoint Global Markets. Recently, Wilmar, a sugar producer, also lowered its expectations for Brazil. Typically, such expectations influence price movements on the ICE exchanges in London and New York.
Unica publishes new production data
New data published by the Brazilian Unica shows that in the first two weeks of April, 42.9 million tons of sugarcane were processed in the central-southern region. This is 2.5% more than the same period last year. Since the beginning of the season (April 1), 3.9% more sugarcane has been processed, totaling 466.2 million tons.
Whether the fires in Brazil at the end of August are related to the higher sugarcane processing in the first half of April is not immediately clear. However, it is possible that the fires forced more sugarcane to be harvested and processed.
Sugar production in the first half of April in the main production region was 3.1 million tons. This is 0.1% lower than the same period last year. Since the beginning of the season, sugar production of 30.3 million tons was 3.6% higher than the same period last year.
In India, the sugar quota for domestic sales in October has been increased to 2.55 million tons, according to the Indian government. This was at 2.35 million tons in September. The reason for this would be upcoming festivals in India, and this way the government keeps sugar prices more stable.
Higher sugar beet yield in Europe
In Europe, the hectare yield of sugar beets is higher due to favorable weather conditions in Western Europe. As a result, the expectation for 2024 has been revised upward from 73.4 tons per hectare to 74.7 tons per hectare in the latest JRC Mars bulletin.
