Global Sugar Shortage Looms as Brazil’s Crop Falters
The global sugar market is bracing for a significant shift as production challenges in Brazil, the world’s largest sugar producer, threaten to create a deficit.
Sucres et Denrées (Sucden), a prominent sugar trading company, has forecasted a shortage of nearly 2 million metric tons for the 2024/25 season.
Brazil’s sugar production has taken a hit due to unfavorable weather conditions. The country’s Center-South region expects a 40% decrease in raw sugar availability during the fourth quarter of 2024 and the first quarter of 2025.
Prolonged droughts and wildfires have damaged crops, raising concerns about future harvests. While the Northern Hemisphere has seen positive sugar production trends, it won’t be enough to offset Brazil’s shortfall.
Countries like Thailand, India, China, and Mexico have increased their output. However, the global sugar industry heavily relies on Brazilian production to meet worldwide demand.
India, the second-largest sugar producer globally, might not come to the rescue this time. The country’s potential to resume exports remains limited, further tightening the global supply.
This situation has led to a surge in raw sugar futures prices, which reached six-month highs in September 2024. The U.S. Department of Agriculture (USDA) has revised Brazil’s sugar production forecast for 2024/25 downward from 44 million tons to 43 million tons.
Global Sugar Market Outlook
Despite this reduction, global sugar production is still expected to increase by 2.5 million tons from the previous year. It will reach a total of 186.0 million tons.
Global sugar consumption is set to hit a new record, driven by growing demand in markets like India and Pakistan. This increased appetite for sugar comes at a time when exports are forecast to decline due to reduced shipments from major producers.
As of early October 2024, raw sugar prices hovered around $23 per pound, marking an 11.47% increase since the beginning of the year. This price surge affects traders, consumers, and food manufacturers worldwide.
Weather conditions in Brazil will play a crucial role in the coming months. Rainfall during this period could significantly influence the potential of Brazil’s sugarcane crop.
Market participants are closely monitoring these weather patterns, understanding their potential to sway the global sugar balance.
This situation highlights the delicate nature of agricultural commodity markets. It also emphasizes the importance of diversified production and resilient supply chains in ensuring stable markets.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.