October NY world sugar #11 (SBV24) fell by $0.31 (-1.62%) to reach a 1.5-week low, while Oct London ICE white sugar #5 (SWV24) decreased by $3.80 (-0.71%) amid broader market pressures. Factors contributing to this decline include a drop in crude oil prices to an 8.75-month low, which may lead sugar mills to focus on sugar production over ethanol, thereby increasing supply.
Recent reports indicate severe damage to Brazil’s sugarcane crop due to drought and wildfires, with industry group Orplana noting around 2,000 fire outbreaks affecting 80,000 hectares. Global sugar production estimates have been cut, with Brazil’s sugar production forecast lowered to 39.2 million metric tons (MMT) for 2024/25, down from 40.0 MMT. The International Sugar Organization also predicts a global sugar deficit of 3.58 MMT for the same period, significantly larger than the previous year’s deficit.
In contrasting news, India’s favorable monsoon has raised expectations for a strong sugar crop, while it continues to implement restrictions on sugar exports to maintain domestic supplies. The USDA forecasts 2024/25 global sugar production could reach a record 186.024 MMT, with a consumption increase to 178.788 MMT, suggesting tightening market conditions ahead.
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