Sugar at an all-time high: market faces an extraordinary scenario in Brazil

Published 2024년 12월 4일

Tridge summary

The international sugar market is currently facing historically high prices, with raw sugar trading at 30% above the average of the last 12 years. This situation is due to a global supply-demand imbalance, despite record production in countries like Brazil and India. The market's stability largely depends on major exporters like the European Union, Thailand, and Mexico overcoming production challenges. Brazil's low production costs and the premium of sugar over ethanol are driving investments and expansion in sugar production, with an expected increase in production by the 2024/25 harvest. The article highlights the opportunity for other countries to increase their sugar production to meet global demand, given their operating costs are lower than current market values. However, the sustainability of supply in the sector remains a challenge, underscoring the need for large exporters to adapt their production to match consumption trends.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The international sugar market is experiencing a unique moment, with historically high prices, although lower than the peaks recorded at the beginning of last year. According to Itaú BBA, a pound of raw sugar is currently trading at US$0.22, a value 30% above the average of the last 12 years. The scenario reflects a mismatch between global supply and demand. While countries such as Brazil and India achieved production close to records in the 2023/24 harvest, other large exporters, such as the European Union, Thailand and Mexico, faced significant drops in their production. Brazil stands out in this context due to its low production costs and the high premium for sugar in relation to ethanol, currently at US$0.07 per pound, far exceeding the historical average of US$0.01. This differential has stimulated investments in new mills and in the expansion of production capacity. Although the current infrastructure limits immediate increases in production, Brazil has the potential to ...

Source: Portal Do Agronegocio