Agriculture Industry

Sugar Prices Fall As Global Supply Concerns Ease

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26 October 2022, New Delhi: March NY world sugar #11 (SBH23) on Tuesday closed down -0.02 (-0.11%), and Dec London white sugar #5 (SWZ22) closed down -1.90 (-0.36%).

Sugar prices Tuesday extended Monday’s losses, with NY sugar dropping to a 2-1/2 week low and London sugar falling to a 3-week low. Prices are under pressure on an easing of sugar supply concerns. Datagro said Tuesday they expect the global sugar market to reach a 1.8 MMT surplus in 2022/23. Last Friday, Covrig Analytics forecasted global 2022/23 sugar production would climb +4.8% y/y to 194.24 MMT, and the global sugar market in 2022/23 will be in surplus by 5.44 MT.

Higher sugar output in India is bearish for prices. The Indian Sugar Mills Association last Monday forecasted that India’s 2022/23 sugar production (Oct 1-Sep 30) would climb +2% y/y to 36.5 MMT as Indian farmers boosted their planted cane acreage by +5.4% y/y to 5.6 mln hectares. In 2021/22, India’s sugar production rose +2.9% y/y to 35.8 MMT. India is the world’s second-largest sugar producer. Also, robust sugar exports from India are bearish for prices after India 2021/22 sugar exports jumped +57% y/y to a record 11 MMT.

Signs of smaller sugar production in Brazil are supportive of prices. Unica reported Oct 11 that Center-South sugar output in the 2022/23 marketing year through September was down -9.9% y/y to 26.334 MMT. Also, Conab, on August 19, cut its estimate for the 2022/23 Brazil sugar crop to 33.9 MMT from an April forecast of 40.3 MMT, citing lower plantings and falling sugar cane yields.

In a bearish factor, StoneX on September 18 projected that Brazil Center-South 2023/24 sugar production would climb +5.7% y/y to 35.2 MMT. StoneX also projects that global 2023/24 sugar production would climb +3% y/y to 194.4 MMT on rising supplies from Brazil, India, and Thailand. StoneX predicts a 2022/23 global sugar surplus of 3.9 MMT.

This past summer’s hot and dry weather in Europe, the world’s third-largest sugar producer, caused smaller sugar beet yields and lower sugar production, which is bullish for sugar prices. Czarnikow Group predicts sugar output in the European Union (EU) and the UK should total 16.4 MMT this year, about 1 MMT lower than last year, which means the EU may have to import more sugar than usual.

Also Read: List of pesticides restricted and banned for use in Agriculture in India

(For Latest Agriculture News & Updates, follow Krishak Jagat on Google News)

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