This Friday, sugar futures saw a sharp decline in the New York and London markets.
This drop came after reports of better-than-expected sugar crops in Asia. Despite this, there’s talk of a tighter supply ahead.
In New York, the most active raw sugar contract fell 2.77%, closing at 21.09 cents per pound.
It varied between 21.88 and 20.96 cents throughout the day. London’s leading contract went down 2.03%, ending at $602.60 per ton.
Prices wavered early on but fell steadily by the afternoon. Wilmar, a commodity trader, shared the news that Thailand and India’s sugar crops would likely exceed initial predictions.
Karim Salamon from Wilmar noted, “Thailand’s sugar crop is faring much better than we thought.”
He expects Thailand to produce between 8.5 and 9 million tons, topping estimates by over a million tons.
India, a major sugar producer, might also beat expectations. Its output could surpass 32.5 million tons, potentially reaching 33 million, mirroring last year’s production.
Wilmar predicts Brazil’s sugar yield will range from 42.5 to 44.5 million tons. “Brazil’s sugar sector is poised to break its crystallization record,” Salamon remarked.
Yet, there’s worry over sugar demand. Traders have reported limited interest in sugar, sparking concerns over low demand.
Meanwhile, the International Sugar Organization (ISO) adjusted its deficit forecast. It now expects a global shortfall of 689,000 tons, up from 335,000 tons.
Sugar’s price fall was somewhat checked by a more than 2% rise in oil prices. This affects production decisions. Also, the US dollar’s drop against the Brazilian real offered some support.
Domestic Outlook
In Brazil, sugar prices have shown no clear direction early this year, with trading sparse.
On the last day measured, the CEPEA/ESALQ Sugar Indicator for São Paulo was at R$145.23 per 50 kg bag, a slight decrease.
Prices remained stable in the North and Northeast at R$157.50, as per Datagro. In Santos (SP), the VHP sugar price fell to $23.70 c/lb FOB, a 5.92% decrease.
These shifts highlight the global sugar market’s volatility, impacted by crop forecasts, demand concerns, and broader economic factors.
The connection between these elements shapes the market, influencing prices worldwide.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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