Global sugar market prices expected to remain strong due to damage to sugarcane crop in Brazil

12-Sep-2024 03:52 PM

New York. A report by Bank of America Global Research has projected the benchmark futures price of raw sugar to remain strong in the New York Exchange during the coming months as the sugarcane crop is being damaged on a large scale due to the massive fire in Sao Paulo, the most important producing state of Brazil - the leading producer and exporter country,

which is likely to lead to a decline in sugar production. Weak production in Brazil may reduce the supply and availability of sugar in the global market.

Anyway, the sugarcane crop in Brazil was already being damaged due to hot and dry weather, while the forest fire has increased its scope even more.

Natural disasters in Brazil are threatening sugarcane production and crushing not only in the current season of 2024-25 but also in the upcoming season of 2025-26.

The yield rate of sugarcane may fall drastically and the crop scorched by heat and fire is very unlikely to revive. According to the report, most of the estimates of sugar production in Brazil are exaggerated.

According to the Bank of America, the global surplus stock of sugar is likely to be only 6.50 lakh tons, which means that its demand and supply equation will remain quite complex in the coming months.

As a result, the future price of raw sugar in the New York Exchange may remain around 21-22 cents per pound. At the beginning of the current week, it closed at 18.83 cents per pound, which was the lowest level in the last two weeks.

Although sugar production is also likely to decrease in India, it will not have any significant impact on the global situation because there is a ban on commercial export of sugar from India.

On the other hand, there is a possibility of sugarcane crop being affected due to extremely heavy rainfall along with storms and severe floods in some areas in Thailand.