On Friday, sugar prices bounced following a weak US dollar and drought conditions in Brazil, rendering slight gains.
US sugar futures for March delivery increased by 0.09% to $0.22 per pound on November 15’s Asian afternoon session. At the same time, London contracts for March shipments closed at $555.00 a tonne.
Prior to this, the cost of the grain faced pressure and dropped to its lowest point in nearly two months over a robust USD. Nevertheless, it has now moderately recovered after the value of the greenback weakened.
On the other hand, Brazil experienced drought and extreme heat, which negatively impacted its sugar output. According to Unica, the production in the Center-South region plunged to -24.30% year-on-year to 1.79 million metric tons (MMT) in October’s second half.
In line with this, the excessively high temperature in the country destroyed crops in the top-producing state of Sao Paulo.
Correspondingly, the industry group Orplana reported that nearly 2,000 fire incidents damaged approximately 80,000 hectares of farmed sugarcane in the area in Brazil.
As revealed by Green Pool Commodity Specialists, roughly 5.00 MMT of sugar was lost after the fire outbreaks. Subsequently, Datagro reduced its Center-South production forecast from 39.30 MMT to 38.70 MMT for 2024/25.
India Encounters Sugar Output Challenges
Based on reports, sugar production in India plummeted to 710,000.00 metric tonnes (MT) during the first six weeks of the 2024-25 season. The National Federation of Cooperative Sugar Factories Ltd (NFCSFL) indicated that mills recorded delayed crushing.
In connection with this, the current output rate in New Delhi is significantly lower than the 1.27 million metric tonnes from last year.
As of November 15, NFCSFL shared in a statement that operational sugar mills in India fell to 144 from 264 in 2023.
Meanwhile, the cooperative body pointed out that recovery rates of the grain retained stability at 7.82%, matching levels in the previous year.
