Sugar prices ended mixed on Thursday, November 3, 2023. Oct NY world sugar #11 (SBV23) closed -0.18 (-0.74%), while Oct London white sugar #5 (SWV23) closed +1.80 (+0.26%).
Prices were impacted on Thursday by the Brazilian real's (USDBRL) weakness, which saw it drop to a 3-week low against the dollar. The weaker ‘real’ encourages export sales by the Brazilian sugar producers.
Factor Impacting Sugar Prices
Due to a +2% increase in crude prices on Thursday, sugar price declines were constrained. A rise in crude oil prices benefits ethanol prices and may lead to an increase in sugar prices by causing global sugar mills to switch their cane crushing operations from producing sugar to ethanol.
The Indian Sugar Mills Association (ISMA) forecast on Wednesday that India's sugar production would decrease -3.4% y/y to 31.68 MMT was supportive of sugar pricing. India is the second-largest producer of sugar in the world.
Brazil’s Sugar Production And Output
In a bearish factor, Unica reported last Tuesday that Brazil’s Center-South sugar output in the first half of July increased by 8.9% year on year to 3.241 MMT, and sugar output in the 2023/24 crop year through mid-July increased by 21.9% year on year to 15.470 MMT. Additionally, this year, 48.14% of the crushed sugarcane was used to make sugar, up from 43.54% the previous year.
Brazil's pleasant weather led sugar trader Czarnikow to increase its forecast for Center-South sugar production for 2023 by 500,000 MT to 38.2 MMT. Additionally, Datagro predicted on 29th June that the main sugar-growing region of Brazil, the Center-South, will produce a record 39.1 MMT of sugar in the 2023–24 marketing year starting April, up +16% y/y.
Other Factors Impacting Global Sugar Pricing
The third-largest sugar producer in the world, Thailand, is experiencing excessive dryness due to which the country may curb sugar production. This is helping to support sugar prices.
Thailand's rainfall this year has been significantly lower than it was at this time last year, and the arrival of the El Nino weather system could result in even lower precipitation over the following two years. The Czarnikow Group projects that this year's Thai sugar production could decline for the first time in three years and possibly reach its second-lowest level since 2009–2010.
The production of sugar crops is typically negatively impacted by the El Nino weather pattern, which typically brings drought to India and heavy rains to Brazil.
The USDA predicted that global 2023–24 sugar production would rise +6.0% y/y to a record 187.881 MMT and that global 2023–24 human sugar consumption would rise +2.3% y/y to a record 180.045 MMT in its biannual report, which was published on May 25. Additionally, according to the USDA, global sugar ending stock levels will drop -15.2% year over year in 2023–2024, reaching a 13-year low of 33.455 MMT.
On May 22, the International Sugar Organization (ISO) reduced its estimates for global sugar production in 2022–2023 from an earlier estimate of 180.4 MMT to 177.4 MMT and for global sugar surplus in 2022–2023 from an earlier estimate of 4.15 MMT to 852,000 MT. On May 4, ISO predicted a +2.1 MMT global sugar surplus for 2023–2024.
If you are a sugar importer wishing to buy sugar in bulk or a sugar exporter willing to export bulk sugar, then Tradologie.com is the right platform for you. Tradologie is a SAAS platform that facilitates bulk agro-trade across the globe. Through Tradologie’s interface, buyers can avail the best qualities of agro-commodities at negotiable rates.The transaction oriented platform currently has 600,000+ verified buyers and about 70,000+ registered sellers of agro-commodities from over 150 countries.
To register as a buyer, click here. To register as a seller, click here.
To stay updated with the latest happenings in the agro-trade industry, follow Tradologie.com across all social media channels.
