**Sugar Prices Surge Amid Monsoon Concerns in India**
On June 26, 2023, New York world sugar #11 closed at $13.97, up 3.17%, while London ICE white sugar #5 closed at $46.56, increasing by 4.34%. The spike in sugar prices comes as India’s Meteorological Department reported cumulative monsoon rainfall is 42% below the normal level, raising worries about a reduced sugarcane harvest in the world’s second-largest producer. Furthermore, forecasts indicate that this monsoon season could be the weakest in 11 years.
Additionally, Brazil’s sugar production is projected to drop by 2.0% year-on-year due to shifts towards ethanol production, with the percentage of sugarcane used for sugar plummeting from 50.09% to 41.42%. This change is attributed to rising crude oil prices, as global sugar forecasts predict a shift from a surplus of 1.4 million metric tons to a deficit of 100,000 metric tons for the 2026/27 season.
The emergence of a “Super El Niño,” with a 67% likelihood, further compounds concerns about rainfall in major sugar-producing regions, including India, Brazil, and Thailand. The U.S. National Oceanic and Atmospheric Administration has indicated that such events could lead to significant disruptions in global sugar production.
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