On Friday, October NY world sugar #11 (SBV24) closed down 2.56% at -0.51, while Oct London ICE white sugar #5 (SWV24) decreased by 1.87% to -10.40. The decline in sugar prices follows the Brazilian real reaching a three-week low against the dollar, triggering long liquidation pressure in sugar futures after a prior week of gains.
Severe drought and heat in Brazil have led to significant damage in the country’s sugarcane crops, with industry group Orplana reporting that nearly 2,000 fire outbreaks impacted up to 80,000 hectares in São Paulo, resulting in an estimated loss of 5 million metric tons. Brazil’s government crop agency Conab also revised its 2024/25 sugar production estimate down to 42 million metric tons from 42.7 million metric tons.
Supporting the market, the International Sugar Organization projected a 2024/25 global sugar deficit of 3.58 million metric tons, significantly larger than the previous year’s estimated deficit of 200,000 metric tons. Additionally, India’s Food Ministry lifted restrictions on sugar mills producing ethanol, suggesting potential prolongation of sugar export curbs amid ongoing efforts to maintain domestic sugar supplies.
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