Global sugar market price softens due to indications of excellent production in Brazil
12-Jul-2024 04:19 PM
New York. Sugar futures prices softened in New York and London exchanges due to the continuation of excellent production in the central southern part of Latin American country Brazil.
The futures price of raw sugar for October contract in New York Exchange fell by 0.38 cents per pound (1.92 percent) and the futures price of white sugar in London Exchange fell by $ 4.40 per tonne (0.79 percent).
The price of sugar fell to a two-week low in New York Exchange. According to the report of UNICA, the apex body of the sugar industry in Brazil, in the current marketing season of 2024-25, sugar production increased to 142 lakh tonnes by the end of June 2024, which was 15.7 percent more than the production of the same period last year.
Similarly, the share of use of sugarcane in sugar production also improved from 47.69 percent last year to 48.72 percent this time.
Sugar production is expected to continue there for a long time. Meanwhile, due to above normal average rainfall in the southwest monsoon in India, sugarcane and sugar production is expected to increase in the next marketing season which will start from October 2024 and continue till September 2025.
On the basis of the equation of production and use, the apex industry body - ISMA has estimated that at the end of the marketing season of 2023-24 i.e. on 30 September 2024, the industry will have a huge outstanding surplus stock of 91 lakh tonnes of sugar.
Which may put pressure on prices. ISMA says that there is a surplus stock of 36 lakh tonnes of sugar, the export of which should be allowed by the government.
By the way, sugarcane crop is being affected due to severe heat, high temperature and lack of rain in Thailand,
which is a factor in increasing the market price of sugar. In more than 50 percent (more than three dozen) of the 77 provinces of Thailand,
the temperature remained at record levels during the month of April. Even during the current year, the average sugar recovery rate from sugarcane there has declined to a low of 13.