Global sugar futures soften due to increased pace of sugarcane crushing in Brazil.

13-Dec-2024 12:41 PM

The global sugar futures market has seen a softening trend due to increased sugarcane crushing in Brazil, which is the largest producer and exporter of sugar in the world.

The accelerated pace of sugarcane crushing in Brazil has led to expectations of a rise in sugar production, putting downward pressure on futures prices.

In New York, the price of raw sugar for the March contract dropped by 0.46 cents per pound, or 2.16%, while in London, the price of white sugar fell by 9.40 dollars per tonne, or 1.74%.

During the second half of November, Brazil's central-southern region crushed far more sugarcane than anticipated—203.50 lakh tons, compared to an expected 1.55 lakh tons, as reported by UNICA (the country's top sugar industry body).

This increase in crushing activity contributed to the decline in sugar futures prices, which hit a two-and-a-half-month low at the start of the current week in New York.

In addition to Brazil's increased output, the International Sugar Organization (ISO) reports a global sugar production shortfall for the 2024-25 season, which is now projected to be 25.10 lakh tonnes less than earlier estimates of 35.80 lakh tonnes. However, this still represents an increase of 13.10 lakh tonnes compared to the 2023-24 season.

Meanwhile, Thailand, the second-largest sugar exporter after Brazil, is expected to see a boost in sugar production for the 2024-25 season.

Production is estimated to rise by 18% to 103.50 lakh tonnes, up from 87.70 lakh tonnes in 2023-24. However, commercial sugar exports to India are not expected to begin at this time. This increase in Thailand's sugar output will likely further add to global market availability.