On Friday, New York sugar prices decreased by 0.31% due to rainfall forecasts in Brazil, which could enhance sugarcane yield. While global sugar production appears to be declining, record deliveries and increased expected output from Brazil and India contribute to bearish trends in the market, requiring close attention to these developments.
On Friday, New York sugar prices contracted by 0.31%, closing at 2-week highs due to predicted rainfall in Brazil. The forecasts from Somar Meteorologia suggest that anticipated widespread showers could alleviate dryness, fostering increased sugarcane yields. In comparison, May London ICE white sugar prices rose by 0.52%.
Throughout the week, sugar prices initially surged, driven by reports of diminishing global sugar production. Notably, Unica reported a year-on-year reduction of 5.6% in cumulative sugar output for the 2024/25 season, while the Indian Sugar and Bio-energy Manufacturers Association adjusted its production forecast downward due to lower sugarcane yields.
The International Sugar Organization raised its global sugar deficit forecast for 2024/25 to 4.88 million metric tons, indicating a tightened market, as it also reduced its global production estimate to 175.5 million metric tons. Contrastingly, Green Pool Commodity Specialists forecasted a surplus in the sugar market for the 2025/26 crop year.
A significant drop in demand contributed to Friday’s price decline, marked by record deliveries of raw sugar against the NY futures contract. This situation suggests that sellers are struggling to find alternative markets and leads to bearish sentiment in sugar pricing.
Moreover, Brazil’s expected increase in sugar production alongside India’s export adjustments weighed heavily on sugar prices. Projections from Datagro reported a rise in Brazil’s output, while the India Sugar Mills Association indicated a potentially significant decline in India’s sugar production.
In light of recent adverse weather conditions, Brazil’s wheat crops have suffered. Fires in Sao Paulo attributed to excessive heat resulted in an estimated loss of 5 million metric tons of sugarcane, further straining the market. Conversely, the USDA foresees a moderate increase in global sugar production for 2024/25.
In summary, New York sugar prices experienced a decline due to forecasts of rain in Brazil, which promise to enhance sugarcane yields. While global sugar production appears to be decreasing, the market is currently facing pressure from record deliveries leading to bearish trends. Expectations for production increases in Brazil and regulatory changes in India further complicate market dynamics, highlighting the need for stakeholders to closely monitor evolving conditions in sugar production and demand.
Original Source: www.tradingview.com
