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Sugar Prices Sag As Sugar Output In Brazil Climbs

Sugar Prices Experience Moderate Decline on Increased Brazil Production and Changing Weather Patterns. India stands as the world's second-largest sugar producer.

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Sugar Prices Sag As Sugar Output In Brazil Climbs

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  1. Sugar Prices Sag As Sugar Output In Brazil Climbs Sugar Prices Sag As Sugar Output In Brazil Climbs Sugar Prices Experience Moderate Decline on Increased Brazil Production and Changing Weather Patterns. India stands as the world's second-largest sugar producer. On Thursday, the July NY world sugar #11 (SBN23) and the August London white sugar #5 (SWQ23) both experienced declines of -0.18 (-0.72%) and -6.00 (-0.86%), respectively. Brazil's Increased Sugar Production Pressures Prices The price of sugar moderately declined on Thursday, with London sugar hitting a 4-week low. Unica reported last Thursday that Brazil's 2023/24 Sugar Seller production through mid-May was up +48% y/y at 4.063 MMT and that the proportion of sugarcane crushed for sugar increased to 45.6% from 38.5% last year, which is negative for prices. On April 26, zConab predicted that as crops recover from the unfavorable weather of the previous season, Brazil's 2023–24 sugar output would increase +4.7% y/y to 38.8 MMT, the second-highest level ever.

  2. Tighter Global Supplies Boosted Prices Last Month Tighter Global Supplies Boosted Prices Last Month Sugar prices surged to 11-year highs in the previous month due to expectations of tighter global supplies. On April 26, the Indian Sugar Mills Association (ISMA) revised its estimate for India's sugar production in the 2022/23 season downward to 32.8 MMT from the initial estimate of 34 MMT in January. India's Food Secretary also expressed concerns about lower-than-expected sugar production, hinting that additional sugar exports may not be permitted this year. In the 2022/23 season, India allowed only 6 MMT of sugar exports, representing a 46% decrease compared to the previous year's allowance of 11.2 MMT. The ISMA further reduced its sugar export estimate for India in 2022/23 to 6.1 MMT from the October forecast of 9 MMT. Additionally, the ISMA highlighted that India's sugar mills are likely to divert 4.5-5.0 MMT of sugar to ethanol production in 2022/23. Changing Weather Patterns Threaten Global Sugar Production Sugar prices receive support from changing weather patterns that have the potential to undermine global sugar production. On May 11, the U.S. Climate Prediction Center raised the likelihood of an El Niño weather pattern emerging between August and October to 94%, up from the previous month's forecast of 74%. If this El Niño pattern occurs, it could result in heavy rains in Brazil and drought in India, negatively affecting sugar crop production. Notably, similar weather conditions in 2015 and 2016 led to dryness in sugar crops in Asia, causing a surge in prices. Revised Estimates by International Sugar Organizations and USDA The International Sugar Organization (ISO) recently adjusted its estimates, reflecting the evolving sugar market. In its most recent update, the ISO lowered its 2022/23 global sugar production estimate to 177.4 MMT from the previous estimate of 180.4 MMT. Additionally, the global sugar surplus estimate for the same period was revised down to 852,000 MT from the previous estimate of 4.15 MMT. On May 4, the ISO also projected a global sugar surplus of +2.1 MMT for the 2023/24 season. 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. The USDA also predicted a -15.2% year/year decline in global sugar ending stocks to a 5-year low of 33.455 MMT in 2023/24. 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 Software as a Service 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 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.

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