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Global Sugar Prices Weighed Down By Weak Crude Prices

India is the worldu2019s largest producer of sugar, and in terms of sugar exports, the Asian country comes in second to Brazil. The ISO reduced its estimate for the worldu2019s sugar surplus for 2022u20132023 from 6.19 MMT to 4.15 MMT and raised its 2021-22 global sugar deficit estimate to -2.25 MMT from a prior estimate of -1.67 MMT. However, the ISO continues to forecast that global sugar production will increase by 4.8% year over year to a record high of 180.4 MMT in 2022u201323.

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Global Sugar Prices Weighed Down By Weak Crude Prices

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  1. Global Sugar Prices Weighed Down By Weak Crude Global Sugar Prices Weighed Down By Weak Crude Prices Prices India is the world’s largest producer of sugar, and in terms of sugar exports, the Asian country comes in second to Brazil. The ISO reduced its estimate for the world’s sugar surplus for 2022–2023 from 6.19 MMT to 4.15 MMT and raised its 2021-22 global sugar deficit estimate to -2.25 MMT from a prior estimate of -1.67 MMT. However, the ISO continues to forecast that global sugar production will increase by +4.8% year over year to a record high of 180.4 MMT in 2022–23. Sugar Price Trends Sugar Price Trends On 14th March 2023, May NY world sugar number#11 (SBK23) closed lower by 0.12 points (-0.58%), and May London white sugar number#5 (SWK23) closed lower by 1.30 points (-0.22%). Also on the 14th, moderate losses were witnessed in sugar prices for a 2nd day. Sugar Prices were weighed on by a more than -4% slump in WTI crude oil prices (CLJ23) to a 3-month low on the 14th. Since the 10th of March 2023, a defensive trend was witnessed in sugar prices when Unica submitted reports that Brazil’s 2022/23 sugar production through Oct-Feb rose +4.5% y/y to 33.504 MMT. Also, Datagro on the 8th projected that 2023/24 sugar production in Brazil’s Center South would climb by +13.1% y/y to 38.3 MMT.

  2. Factors Affecting Sugar Prices Factors Affecting Sugar Prices Cut in ethanol prices due to lower crude prices may prompt sugar mills globally to divert more sugarcane crushing operations towards the production of sugar rather than ethanol which would boost the supply of sugar. On March 9th, due to worries about the weather around the world, May NY sugar posted a contract high and London sugar increased to a 5-3/4 month nearest-futures high. The La Nina weather pattern, which had an impact on weather patterns over the previous three years, has ended, according to the U.S. Climate Prediction Center, and an El Nino weather pattern has a 61% chance of forming in the second half of this year. If the El Nino pattern materializes, it might cause drought in India and heavy rains in Brazil, which would be detrimental to the growth of the sugarcane crop. Smaller sugar output in India has also created underlying support for erratic sugar prices. On January 31, the Indian Sugar Mills Association (ISMA) reduced its forecast for India’s sugar production in 2022–2023 from 36.5 MMT to 34 MMT and its forecast for India’s sugar exports in 2022–2023 from 9 MMT to 6.1 MMT. In addition, the ISMA predicted that by 2022 or 2023, sugar mills in India will divert 4.5 to 5.0 MMT of sugar to ethanol production. Sugar prices are supported by the decline in European sugar production. On December 8, the European Association of Sugar Manufacturers predicted that EU sugar production would decrease - 7% year over year to 15.5 MMT in 2022–23. Another factor bearish on the prices is the prospect of additional sugar exports from India. India’s Food Minister Singh said on the 6th of March that the country could allow additional exports of 1 MMT sugar if the output reaches the Government’s target of 33.6MMT. Indian Food Minister Singh said last Monday that India could allow another 1 MMT of Sugar Exports if India’s 2022/23 sugar output reaches the government target of 33.6 MMT. India has already permitted the export of 6 MMT of sugar. India’s 2022–23 sugar production increased by 1.8% year– over–year to 25.76 MMT, according to a report published on March 3 by the Indian Sugar Mills Association (ISMA). The Thai Sugar Mills Corp’s prediction on February 1 that Thailand’s sugar production would increase +14% y/y to 11.55 MMT in 2022–23 was a bearish factor for Thailand’s sugar exports are also anticipated to rise +17% y/y to 9.05 MMT in 2022–23. MMT. According to a recent report by Green Pool Commodity Specialists, Thailand’s 2023 sugar production as of February 8 was 6.59 MMT, an increase of almost 10% from the previous season, with record-high sugar content in the cane crop. If you are an importer wishing to buy bulk quantities of agro-commodities including sugar or are an exporter willing to export sugar, then Tradologie.com is the right platform for you. Our platform has over 600,000 buyers as well as 70,000+ exporters of agro-commodities from over 100 countries and through the platform, you can strategize bulk agro-trade with ease. If you want to be a registered buyer, click here. To register as a seller, click here. Follow Tradologie.com on all social media platforms to stay updated with the recent happenings of the agro-trade industry.

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