On Tuesday, sugar prices were backed by drought and wildfires in Brazil, causing its production forecast to plummet.
US sugar futures for October delivery rose by 0.10% to $19.40 per pound on September 03’s Asian afternoon session.
Czarnikow reduced its Brazil Center-South 2024/25 estimated output to 39.20 million metric tons (MMT) from 40.00 MMT amid the severe heat and fires. Moreover, analysts spiked the crop’s deficit projection to -600,000 MT from the past -300,000 MT outlook.
Last week, the sweetener’s price increased, hitting 1-1/2 month highs due to the calamities in Brazil, mainly affecting its top-producing state, Sao Paulo.
According to a sugarcane industry group, around 2,000 fire outbreaks damaged 80,000 hectares of plantings in Sao Paulo. Specialists added that as much as five MMT of canes were lost.
Furthermore, on August 22, Conab slashed its 2024/25 production forecast to 42 MMT, lower than its previous 42.70 MMT reading. They underlined lower yields brought by excessive heat and drought.
Moreover, a bullish factor for its prices was the ISO’s outlook for a more significant crop deficit, down by -1.10% yearly.
India’s Food Ministry eased restrictions on sugar mills that produce ethanol, prolonging the country’s export curbs. New Delhi enabled 6.10 MMT of exports in 2022/23 after allowing a record of 11.10 MMT in the last season.
Punjab Government to Ditch Indicative Sugar Pricing
According to reports, the Punjab government discussed eliminating farmers’ indicative pricing on sugar canes. The move followed the decision to deregister the crop’s sector.
A policy guideline of Punjab’s top bureaucracy states that suggestive pricing of the canes for the crushing season will be discontinued starting in November.
In addition, the federal government mentioned that it plans to ease curbs on sugar imports and exports. Authorities commented that the deregulation of the sweetener sector benefits the industry and growers.
