Due to decrease in production in Brazil, it is necessary to increase the supply of sugar from Thailand and India.
27-Sep-2024 04:07 PM
New York. Due to incidents like scorching heat, drought-like conditions, severe lack of rain and forest fires, there is a possibility of a sharp decline in the production of sugarcane and sugar in Brazil.
This will reduce the supply of sugar in the global market and to meet this shortage, it will be necessary to increase the supply from Thailand and India.
The case of India is somewhat complicated because the commercial export of sugar from here has been banned since June 2023. On the other hand, the situation of sugar supply in Thailand is also not very good.
Brazil is the largest producer and exporter of sugar in the world. Due to various natural disasters, the sugarcane crop has suffered heavy losses and is still suffering.
As a result, the global futures price of sugar jumped in the current week to the highest level after February 2024.
Analysts say that prices may rise further in the future. Sugar production in India will start from next month, while in Thailand it starts in December. An analyst has even said that the sugar market is sitting on a heap of gunpowder and a bullish explosion can happen there any time.
Due to unfavourable weather, the supply of sugar from Brazil has started declining while the demand remains strong.
As a result, the futures price of raw sugar has increased by more than 20 percent in the New York Exchange during the current month.
For the first time after July, strong activity of speculators is being seen who are trying to raise the prices as high as possible. There is still a possibility of further bullishness in the market.
According to critics, the global market price of sugar may generally remain high and strong during the last quarter of the current year and the first quarter of the next year.
Meanwhile, it will be necessary to keep an eye on the policy of the Indian Government and the production situation in Thailand.
If exports from India start, then there will be some pressure on the prices, otherwise the bullish environment may remain. Recently, Thailand has witnessed heavy rains and floods due to the storm.