Reduced Sugar Production in Brazil Supports Sugar Prices
Sugar prices posted moderate gains on Tuesday, with NY sugar rising to a one-week high. The March raw sugar contract rose 0.43 cent, or 1.9%, to 22.82 cents per lb, rebounding after falling earlier in the day as oil prices fell. Meanwhile, the December white sugar contract rose 0.4% to $577.70 per tonne.
Sugar prices have been supported since Monday, when food processor Wilmar International cut its 2024/25 Brazil Center-South sugar production forecast to 38.2-39.5 million tonnes, citing limited rainfall and high temperatures, according to Barchart analysis.
Sugar prices have also been supported since last Friday, when Unica reported that sugar production in Brazil's Center-South region during the second half of September fell 16.2% to 2.829 million t. On the other hand, Center-South sugar production for 2024/25 through September increased 1.5% to 33.154 million tons.
Estimates from New York and India
NY sugar on September 26 rose to a 7.5-month high as drought conditions in Brazil reduced the country’s sugar production outlook. On September 20, Rabobank cut its 2024/25 Brazilian sugar production forecast to 39.3 million tonnes from a previous forecast of 40.3 million tonnes, citing excessive drought.
There is optimism that above-average monsoon rains in India are expected to lead to a bumper sugar harvest, which could be bearish for sugar prices. The Indian Meteorological Department reported that India received 934.8 mm of rain during the current monsoon season as of September 30, the highest in four years and 7.6% more than the comparable long-term average of 868.6 mm. The monsoon season in India runs from June to September.
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Sugar prices have been supported since Monday, when food processor Wilmar International cut its 2024/25 Brazil Center-South sugar production forecast to 38.2-39.5 million tonnes, citing limited rainfall and high temperatures, according to Barchart analysis.
Sugar prices have also been supported since last Friday, when Unica reported that sugar production in Brazil's Center-South region during the second half of September fell 16.2% to 2.829 million t. On the other hand, Center-South sugar production for 2024/25 through September increased 1.5% to 33.154 million tons.
Estimates from New York and India
NY sugar on September 26 rose to a 7.5-month high as drought conditions in Brazil reduced the country’s sugar production outlook. On September 20, Rabobank cut its 2024/25 Brazilian sugar production forecast to 39.3 million tonnes from a previous forecast of 40.3 million tonnes, citing excessive drought.
There is optimism that above-average monsoon rains in India are expected to lead to a bumper sugar harvest, which could be bearish for sugar prices. The Indian Meteorological Department reported that India received 934.8 mm of rain during the current monsoon season as of September 30, the highest in four years and 7.6% more than the comparable long-term average of 868.6 mm. The monsoon season in India runs from June to September.
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