Sugar Trends in 2023

Over the past six months, sugar prices rose significantly due to tight global supplies in major producing countries like India. The Sugar #11 Jul '23 (SBN23) contract on the Intercontinental Exchange (ICE) closed at USD 0.26 per pound (lb) on April 27, up 29.3% month-on-month (MoM), the highest in over 11 years. A similar trend was observed for the London White Sugar #5 Aug '23 (SWQ23) contract, which closed at USD 711.60 per metric ton (mt) on April 28, up 18.2% MoM.

Another bullish factor is sugarcane’s diversion toward ethanol production and away from sugar supplies, which has been encouraged by the decision of the Organization of Petroleum Exporting Countries (OPEC) to reduce oil output by 1.16 million barrels per day. Indian Sugar Mills Association’s (ISMA) recent Indian sugar production forecast of 32.8 million metric tons (mmt) for MY 2022/23 had factored in a diversion of 4.5 mmt toward ethanol production, which may now increase following OPEC's recent decision.