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On October 4, 2023, sugar prices rose significantly, with October NY world sugar #11 up 1.48% to $16.44 and August London ICE white sugar #5 up 1.31% to $487.70. This increase follows a sharp 2% rally in WTI crude oil, indicating potential shifts in sugar production towards ethanol due to higher crude prices.
Recent reports indicate that global sugar supplies may tighten, as Pakistan plans to import 500,000 metric tons (MT) and the Philippines 424,000 MT. While sugar prices have dropped significantly over the past three months due to expectations of a surplus, concerns about production levels, particularly in India, could further impact prices. The USDA forecasts a 4.7% increase in global sugar production for the 2025/26 season, reaching 189.318 million metric tons (MMT), with ending stocks projected at 41.188 MMT.
Moreover, Brazil’s sugar output has decreased by 14.6% year-on-year to 9.404 MMT through mid-June 2023, contributing to market fluctuations. Additionally, the International Sugar Organization estimates a 9-year high global sugar deficit forecast of -5.47 MMT for 2024/25, indicating a potential tightening market after last season’s surplus of 1.31 MMT.
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