As of today, March NY world sugar #11 (SBH25) is down 0.33 cents (-1.42%), and December London ICE white sugar #5 (SWZ24) is down 7.30 (-1.25%). Sugar prices retreated from one-week highs after the dollar index reached a seven-week peak, leading to long liquidation in sugar futures. This follows a recent rise influenced by surging crude oil prices that could shift sugar production to ethanol.
A significant factor impacting sugar prices is Brazil’s drought, which Rabobank recently projected will reduce the country’s 2024/25 sugar production forecast to 39.3 million metric tons (MMT) from 40.3 MMT. Fires in Sao Paulo, caused by drought and excessive heat, have reportedly impacted 80,000 hectares of sugarcane, resulting in an estimated loss of 5 MMT of sugarcane.
Meanwhile, India’s monsoon saw 934.8 mm of rain, the highest in four years, which bodes well for its sugar crop. India’s 2024/25 sugar production is projected to decrease by 2% to 33.3 MMT. In contrast, Thailand anticipates an 18% increase in sugar production to 10.35 MMT for the same period, adding bearish pressure on sugar prices.
