On Wednesday, sugar prices declined due to weakness in crude, potentially prompting global mills to shift to grain production and increasing supplies.
US sugar futures for October delivery dropped by -0.66% to $19.63 per pound on July 17’s Asian afternoon session.
According to the Indian Sugar and Bio-energy Manufacturers Association’s report, its 2023/24 reserves had a surplus of 3.60 million metric tons (MMT). They also pushed the government to enable higher exports of surplus grains.
India has held back the commodity’s exports since October 2023 to maintain stable domestic supplies. However, the association said that the country’s 2023/24 production of the sweetener from October to April slid by 1.60% year over year.
Brazil’s crop agency forecasted that its 2024/25 marketing year production will increase by 1.30% YoY to a record 46.292 MMT. Also, the sugar acreage in the country will jump by 4.10% to 8.70 million hectares, the largest in seven years.
Moreover, Unica reported that Brazilian output went up by 25.70% YoY to 42.425 MMT for the 2023/24 marketing year close.
Meanwhile, the International Sugar Organization heightened its global sugar deficit forecast to -2.95 MMT from February’s -689,000 metric tons. Additionally, it raised its demand estimate to 182.2 MMT, which stated revisions to India’s consumption data.
USDA Sugar Production and Import Outlook Increased
The US Department of Agriculture’s (USDA) WASDE report increased its sugar production and import forecast for 2023/24, leading to higher ending stocks.
Moreover, the period’s estimates hit 3,619,000 tons, 165,259 tons higher or 4.80% up from June. This was driven by more imports from Mexico and record-large high-duty imports.
USDA’s 2024/25 outlook for sugar production spiked by 124,816 tons from June, while the cane grains are unchanged.
Also, the department’s anticipated production for Mexico declined from June as the season approaches a close. Domestic consumption went up, and exports rose to 432,000 tons.
