Located in Asia, India is the largest sugar producer and the second largest Sugar Exporter in the world behind Brazil. Following an increase in the global demand for sugar, sugar exporters demanded a hike in prices for their already-signed contracts as they wished to take advantage of the high global prices. Sugar prices on 2nd of December 22 posted moderate losses due to an increased output of sugar in India.
Increased Global Sugar Output
The Indian Sugar Mills Association (ISMA) on the 2nd of December reported that the country’s October-November sugar production rose by 1.5% year-on-year to 4.79 Million Metric Tonnes (MMT) keeping India as the world’s largest sugar producer.
Moreover, a fall of more than 1% in crude oil prices (CLF23) on the 2nd has also weighed on the prices of sugar. The lower crude prices undercut the prices of ethanol which could prompt Brazil’s sugar mills to divert more cane-crushing operations towards sugar production rather than ethanol, thus further boosting sugar supplies.
Sugar Pricing
March NY world sugar #11 (SBH23) on Friday closed down -0.14 (-0.71%), and March London white sugar #5 (SWH23) closed down -5.50 (-1.02%). Sugar prices were already on the defensive from 1st December ’22 when StoneX boosted its global 2022-23 sugar surplus estimate to 5.2 MMT from a September estimate of 3.9 MMT. StoneX also predicts Brazil’s 2023-24 Center South sugar production to climb by 5.2% year-on-year to 35.6 MMT.
Decline In Price Of Sugar
Increased sugar production in Brazil is bearish for prices after Unica reported on 25th November’22 that Brazil’s Center-South sugar output in the 2022-23 marketing year through mid-November rose by 0.3% to 31.966
MMT. Also, the Organization of Cane Producers Association in Brazil forecasted on 28th November, Brazil’s sugar output in 2022-23 at 36.9 MMT due to favorable weather and that production would reach 37.2 MMT in 2023-24. The higher sugar output in India is also bearish for the prices of the commodity. On the 24th of October, the ISMA forecasted that India’s 2022-23 sugar production (Oct 1-Sep 30) would climb up by 2% to 36.5 MMT as Indian farmers boosted their planted cane acreage by 5.4% year-on-year to 5.6 million hectares. In 2021-22, India’s sugar production rose by 2.9% to 35.8 MMT. Also, robust sugar exports from India are bearish for prices after India’s 2021-22 sugar exports jumped by 57% to a record 11 MMT. However, the Indian Sugar Mills Association earlier this month said that India’s sugar production from Oct 1st to Nov 15th fell by 4.3%.
In a bearish factor, the International Sugar Organization (ISO) on 29th November projected that global 2022-23 sugar production would climb by 5.5% to a record high of 182.1 MMT. ISO also projected that the 2022-23 global sugar market would be in a surplus of 6.2 MMT.
If you are an importer wishing to buy sugar in bulk or an exporter willing to supply bulk quantities of sugar and its associated products, then Tradologie.com is the right platform for you. Tradologie has 600,000+ verified global buyers and 70,000+ verified suppliers of food and agro-commodities in its network and through the platform, you can conduct bulk agro-trade with ease.
To register as a buyer, click here. To register as a seller, click here. To stay updated with the recent happenings of the agro-trade industry, follow Tradologie.com across all social media channels.
REFERENCE
https://bit.ly/3unQ5c3
