Global Sugar Prices Climb as Brazil Drought and India Production Concerns Intensify

Sugar futures rose 2.1% to 19.25 cents per pound yesterday, extending recent gains driven by production uncertainties in major growing regions.

The Indian Sugar Mills Association reported India will likely produce 26.4 million metric tons of sugar through September, dropping nearly 3% from earlier forecasts. Weather conditions play a crucial role in the current market dynamics.

Brazil faces unusually dry weather that harms sugarcane growth, while India battles with red rot infestation in central Uttar Pradesh. These challenges create significant supply concerns in the world’s two largest sugar-producing nations.

Brazil achieved record sugarcane production of 705 million metric tons in the 2023-24 marketing year. However, experts forecast an 8.5% reduction for the 2024-25 season due to persistent drought conditions.

The country currently supplies approximately 75% of global raw sugar trade, making any production shortfall particularly impactful. Market traders express growing doubt that India will fulfill its export quota of 1 million tons.

The government continues prioritizing domestic needs through export restrictions while promoting ethanol production. India consumes around 31 million metric tons annually, making it the world’s largest sugar consumer.

Global Sugar Market Outlook

Global sugar production will reach an estimated 187.9 million metric tons during 2023-24, exceeding the previous year by 10.6 million tons. Yet analysts project global stocks will hit six-year lows by early 2025 despite increased output.

The Indian Sugar & Bio-energy Manufacturers Association projects a 2% decline in gross sugar production for 2024-25, primarily attributed to a 6% reduction in sugarcane acreage. The country expects to start the season with substantial opening stocks of approximately 9.05 million metric tons.

White sugar prices also rose 1% to $538.70 per metric ton yesterday. Brazil continues facing logistical bottlenecks at major ports, particularly Santos, further complicating export capabilities.

The combined effect of India’s export limitations and Brazil’s weather troubles creates ideal conditions for continued price volatility. Analysts note that while short-term fluctuations will occur, the structural supply challenges could maintain upward pressure on prices through much of 2025.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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