Sugar futures recorded notable rises on the New York and London exchanges during the Wednesday afternoon trading session.
Upward movement influenced by oil price surge, currency fluctuations, and concerns over reduced sugar harvest outputs in key regions.
By midday in Brazil, the most traded contract for raw sugar on the New York Exchange saw an increase of 2.11%, reaching 21.32 cents per pound.
Concurrently, in London, the principal contract for sugar escalated by 1.88%, hitting a price of $605.50 per ton.
The backdrop to these developments was provided by Geovane Consul, the CEO of BP Bunge Bioenergia, during a sugar industry conference held in Dubai.
The Consul noted a projected 4.4% decrease in sugar production, estimating 40.8 million tons for Brazil’s Central-South region’s upcoming cycle.
This prediction is primarily attributed to the adverse weather conditions affecting the region.
Reuters underscores broad concerns, including harvest outlooks in major Asian sugar-producing nations like India and Thailand.
The spike in international oil prices played a pivotal role in boosting sugar prices, as it affected the biofuel versus sugar production mix decisions made by producers.
The dollar’s depreciation against the Brazilian real boosts sugar prices, enhancing Brazil’s competitiveness in international markets and stimulating exports.
These complex dynamics demonstrate the interplay between various global factors and the sugar market.
Oil prices shape biofuel decisions, currency trends affect export competitiveness, underscoring sugar industry’s dependence on economic and environmental factors.
Reduced harvest concerns in Brazil, India, and Thailand underscore agricultural vulnerability to climate and market fluctuations.