Sugar Prices Soar as India Extends Export Restrictions

On Wednesday, sugar prices lifted after India, the world’s second-largest producer, said it would retain its export limits until further notice.

US sugar futures for July delivery advanced 1.59% to ¢19.16 per pound on June 05, erecting a four-session winning streak. Furthermore, market analysts predict a 0.43% gain to ¢19.24 a pound in the coming trading session.

According to industry watchers, the sweet commodity breached the critical resistance level of $18.90, which it briefly touched on Tuesday. Thus, they expect the bullish wave to continue this week before submitting to downward pressure in the following weeks.

Record-high temperatures in Thailand, the world’s third-largest sugar producer, have significantly damaged the country’s sugarcane crops. Thailand’s Meteorological Department stressed that almost 40 of the country’s 77 provinces broke their temperature records.

Adding to the bearish sentiment, the agency reported less rainfall than last year, making it harder to sustain sugarcane sprouts. Therefore, Thai millers cautioned that crushed cane in the current crop season might produce the lowest yield in 13 years.

In contrast, Unica reported that sugar production in Brazil climbed by 1.18% year-over-year (YoY) to 2.57 MMT from 2.54 MMT the year before. Moreover, output for the 2024/25 crop season through mid-May gained 25.67% to 5.14 MMT from last year’s 4.09 MMT.

India’s Falling Yield Strains Global Sugar Supply

Unfavorable weather in India forced 516 mills to suspend operations as of April 30, 12.17% more than 460 at the same time a year ago. As a result, production for October-April decreased by 1.60% YoY to 31.40 MMT as growers ended their sugarcane crash early.

Hence, the Indian government indefinitely extended its sugar export limit of 6.10 MMT, 45.06% below the previous season’s 11.10 MMT. Previously, the restriction was to last only until October 31, as New Delhi expected stockpiles to have recovered by then.

Unfortunately, persistent El Niño brought arid conditions to Karnataka and Uttar Pradesh, India’s top sugarcane farming regions. The two states account for over 80.00% of India’s total output, making them key drivers in the country’s sugar policies.

Sending
User Review
0 (0 votes)

RELATED POSTS

Leave a Reply