On Monday, sugar contracts inched down slightly as optimism for above-normal monsoon rains in India might result in a bumper crop.
US sugar futures for October delivery declined by -0.42% to $18.83 per pound on September 09’s Asian afternoon session.
According to reports from the Indian Meteorological Department, the country received 792.50mm of rain, 8.00% more than the long-term average of 734.80 mm.
Higher production in Brazil negatively impacted prices. Brazil’s South-Center outputs rose by 5.40% year over year to 23.91 million metric tons (MMT).
On the other hand, India’s Food Ministry eased restrictions on its ethanol mills for 2024/25, which could prolong export curbs.
New Delhi has restricted sweetener shipments since October 2023 to maintain ample domestic supplies. It only allowed 6.10 MMT deliveries of the grain from the 2022/23 season to September after enabling exports of 11.10 MMT in the last season.
In Thailand, record heat could damage their sugarcane crops. Based on its reports, more than three dozen of the nation’s 77 provinces posted high temperatures in April.
As a result, millers in Bangkok had their lowest yield from crushed cane this year in almost 13 years. Meanwhile, Thailand’s government forecasted that their 2023/24 sugar outputs hit 8.77 MMT, higher than its February outlook of 7.50 MMT.
Brazil Sugar Crop Slump Can Raise Prices
On September 09, Bank of America (BofA) Global Research noted that benchmark raw sugar could maintain solidity and potentially jump from current levels.
According to analysts, cane crushing in Brazil, the global top producer and exporter, missed output anticipations. This came amid dry weather and recent wildfires in Sao Paulo state.
Moreover, BofA expects the sugar balance to be slightly surplus at 650,000 metric tons, which can lead to a 54.10% stocks-to-use ratio. The figures could boost prices to around $0.21 to $0.22 per pound.
