On Thursday, sugar prices declined amid pressure from signals of more enormous global stockpiles and above-average monsoons in India.
The crop futures for October delivery closed the trading session by plummeting -0.78% to $17.83 per pound. However, sugar futures later increased by 0.56% to $17.93 a pound.
According to reports, Brazil’s Center South sugar output this year through last month surged by 8.00% annually at 20.75 million metric tons (MMT).
Furthermore, the buoyancy of above-average monsoon rainfall in India will likely favor the sugar crop, a bearish factor for commodity prices.
The Indian Meteorological Department also revealed that New Delhi had gained 579.7 millimeters (mm) of rain during the current monsoon season. This is 7.00% better than the comparable long-term average of 481.90 mm.
Meanwhile, Brazil’s crop production from 2024 to 2025 is expected to rise by 1.30% to a record 46.29 MMT. This comes as the country’s sugar acreage surges by 4.10% to 8.7 million hectares (21.5 million acres), its most in seven years.
Moreover, in July, the Indian Sugar and Bio-energy Manufacturers Association disclosed that India’s 2023 to 2024 stock was at 9.1 MMT and revealed a 3.6 MMT surplus.
In addition, reports indicated that New Delhi had halted sugar exports since October last year to maintain sufficient domestic supplies.
Sugarcane Price Hike Affects Sugar Industry Stability
The Kenya Sugar Manufacturers Association (KESMA) has objected to the Sugar Directorate’s new cane price hike.
According to reports, the new cost is KSh4,950 ($38.37) per ton. However, KESMA has argued that the price increase was unjust and threatened the stability of the sugar business.
In a letter to the Sugar Directorate, the association expressed concerns about duty-free sugar imports from Uganda and other illegal imports.
KESMA Chief Executive Stephen Ligawa criticized the Directorate’s unjustifiable price hike, warning it could worsen millers’ financial struggles, risking insolvency and industry collapse.
Ligawa added that it is unimaginable that the Directorate has decided on a price increase far beyond reasonable under the current regulations.
He also noted that implementing this price would worsen the millers’ already dire financial circumstances, potentially driving them to bankruptcy and causing the industry to collapse.
