6-Sugar Prices Decline Modestly As Brazil Boosts Sugar Production

1. Sugar Prices Decline Modestly As Brazil Boosts Sugar Production Sugar Prices Decline Modestly As Brazil Boosts Sugar Production On 26th September, Dec London white sugar #5 (SWZ23) closed at -7.40 (-1.03%), and Oct NY world sugar #11 (SBV23) closed at -0.29 (-1.10%). Price Drop For Sugar And Affects Of India’s Policy On Sugar Exports Price Drop For Sugar And Affects Of India’s Policy On Sugar Exports On the 26th, sugar prices increased the previous days losses to 2-week lows due to increased sugar production in Brazil. According to Unica, the first half of September saw an increase in sugar production in Brazil's Center-South of +8.5% y/y to 3116 MMT, and the second half of September saw an increase in sugar production of +18.7% y/y to 29.258 MMT for the crop year 2023/24. Additionally, 49.37% of the crushed sugarcane—up from 45.47% last year—was used to make sugar this year. Considering that the Brazilian real (USDBRL) on Tuesday fell to a 2-week low against the dollar, real weakness also led to a decline in sugar prices. The weaker real encourages export sales by Brazil's sugar producers. Sugar prices have risen sharply in recent weeks, with NY sugar reaching a 12-year high for nearest- futures last Tuesday and London sugar reaching a 12-year high on September 14 due to concerns about reduced global sugar production. On September 5, the biggest sugar trader in the world, stated that it anticipates a -5.4 MMT global sugar deficit in 2023–24, the sixth year of shortages, as India's sugar exports may be curtailed and farmers in Thailand plant more lucrative cassava rather than sugarcane. There is speculation that India may soon announce export restrictions on its sugar supplies, which supports the price of sugar. According to a report from August 23, due to a lack of monsoon rain, India is considering prohibiting its sugar mills from exporting sugar in the 2023–24 season, which starts in October. The monsoon rain in India from June to August was 10% below average, and the country's

2. August rainfall of only 162.7 mm was the lowest since at least 1901. When accurate estimates of total production are available, the Indian food ministry said it will decide definitively on sugar exports for 2023–2024. Following a record-breaking 11.1 MMT of sugar exports last season, India only permitted mills to export 6.1 MMT of sugar during the current 2022–23 season through September 30. On August 2, the Indian Sugar Mills Association (ISMA) predicted that the country's 2023–2024 sugar production would decrease -3.4% year over year to 31.68 MMT. Other Elements That Affect Sugar Pricing Other Elements That Affect Sugar Pricing Thai Sugar Millers Corp predicted on September 7 that due to a severe drought, Thailand's 2023–24 sugar production would decline by -18% y/y to 9 MMT, which is bullish for prices. Thailand is the 2nd- largest exporter and 3rd-largest exporter of sugar globally. Separately, sugar trader Czarnikow predicted on August 7 that due to dry weather, Thailand's sugar production would fall -31% y/y in 2023/24 to a 17- year low of 7.4 MMT. Thailand's rainfall this year has been significantly lower than it was at this time last year, and the arrival of the El Nino weather system could result in even lower precipitation over the following two years. Reduced demand from China, whose sugar imports fell by 46.4% year over year to 370,000 MT in August, is another unfavorable development for the commodity. Brazil's high output of sugar is a bearish factor for sugar. On August 17, Conab increased its forecast for Brazil's sugar output in 2023–2024 from 38.8 MMT to 40.9 MMT due to favorable weather that increased sugarcane yields. Concern that an El Nino weather pattern could sabotage global sugar production is a bullish factor for sugar. The U.S. Climate Prediction Center reported on June 8 that sea surface temperatures in the equatorial Pacific Ocean had increased by 0.5 degrees Celsius above average and that El Nino criteria had been met due to changes in wind patterns. The production of sugar crops is typically negatively impacted by an El Nino weather pattern, which brings Brazil heavy rains and India drought. In 2015 and 2016, El Nino dried up the last time sugar crops were grown in Asia, driving up the price of the commodity. The USDA predicted that global 2023–24 sugar production would rise +6.0% y/y to a record 187.881 MMT and that global 2023–24 human sugar consumption would rise +2.3% y/y to a record 180.045 MMT in its biannual report, which was published on May 25. Additionally, according to the USDA, global sugar ending stock levels will drop -15.2% year over year in 2023–2024 to a 13-year low of 33.455 MMT. In the meantime, ISO predicted on August 10 that global sugar production would decrease 1.2% year over year to 174.8 MMT and that the global sugar market would experience a 2.12 MMT deficit in 2023/24 after experiencing a +852,000 MT surplus in 2022/23. If you are a sugar importer wishing to buy sugar in bulk or a sugar exporter willing to export bulk sugar, then Tradologie.com is the right platform for you. Tradologie.com is a Software as a Service platform that facilitates bulk agro-trade across the globe. Through tradologie.com’s interface, buyers can avail the best qualities of agro-commodities at negotiable rates. The transaction oriented platform has 600,000+ verified buyers and about 70,000+ registered sellers of agro-commodities from over 150 countries.

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