On October 24, 2023, sugar prices rose for the second consecutive day, with October NY world sugar #11 closing up 0.16 cents (+0.97%) and October London ICE white sugar #5 up 0.50 cents (+0.11%). This uptick follows a significant increase in crude oil prices, which surged over 3%, prompting sugar mills to potentially shift more of their cane production towards ethanol, thus impacting sugar supply.
Demand for sugar appears to be increasing, evidenced by China’s June sugar imports skyrocketing by 1,435% to 420,000 metric tons. In the U.S., President Trump announced Coca-Cola’s agreement to switch to cane sugar, which could raise US sugar consumption by 4.4%, bringing it to 11.5 million metric tons. Meanwhile, projections indicate a possible 19% increase in India’s sugar production to 35 million metric tons by the 2025/26 season, raising concerns about future price stability.
Contrastingly, forecasts suggest a global surplus of 7.5 million metric tons for the 2025/26 season, the largest in 8 years. Brazil and India are expected to see increased production, with Brazil’s sugar mills slated to crush 54% of available cane, potentially adding 3.2 million metric tons of sugar to the market, further complicating the price outlook.
