The probability of El Niño during May-August worries global sugar production in 2023/24 cycle

A report by hEDGEpoint Global Markets provides an in-depth analysis of the potential impact of El Niño on the global sugar market, with a focus on the key role of weather conditions in sugar production. The report highlights that the primary sugar-producing countries, including Brazil, India, Thailand, and Central American regions, are heavily reliant on sugarcane, which requires specific climatic conditions for growth. The article outlines how El Niño can disrupt these conditions, leading to variations in sugar production. While not directly causing sugar harvest failures, El Niño can introduce volatility in sugar availability, particularly during the June/August period. The report also notes that the effects of El Niño can differ across regions, with some areas experiencing increased precipitation during the beet development phase, which could potentially enhance sugar production if the timing is favorable. However, the possibility of stronger El Niño events could raise concerns for the 22/23 and 23/24 sugar production seasons, especially with the ENSO forecast predicting higher chances of El Niño formation between May and August.