**Sugar Prices Show Gains Amid Crude Oil Strength and Production Forecasts**
On October 2, 2023, sugar prices experienced gains, with New York world sugar #11 (SBV23) closing at +0.19 (+0.79%) and London white sugar #5 (SWV23) closing at +4.80 (+0.71%). The rise is attributed to a rally in crude oil prices, which climbed over 1% to a 3.5-month high, potentially leading to a shift toward ethanol production by global sugar mills.
Brazil’s sugar production is showing signs of acceleration, with a reported 8.9% increase year-on-year in the first half of July, totaling 3.241 million metric tons (MMT). Additionally, forecasts from Czarnikow indicate a 2023 Center-South sugar production increase to 38.2 MMT, while Datagro predicts a record 39.1 MMT for the 2023/24 marketing year—a 16% rise from the previous year. Conversely, excessive dryness in Thailand may lead to lower sugar production for the first time in three years, raising concerns about global supply under the influence of El Niño weather patterns.
The USDA estimates global sugar production for 2023/24 to rise by 6% to a record 187.881 MMT, while global consumption is expected to increase by 2.3% to a record 180.045 MMT, resulting in a projected significant reduction in global sugar ending stocks.
