In W19 in the sugar landscape, following the 11-year peak reached on April 27, the July sugar futures contract concluded the session on Monday, May 8, on the New York Stock Exchange, down close to 1% to 26.09 cents/lb. The price of sugar increased by 0.38% to 26.19 cents/lb on May 9 and increased by another 1.5% on May 10 to reach 26.66 cents/lb. This is primarily due to concerns about supply resulting from lower than anticipated production in significant origins, including India, Thailand, China, and the EU, as well as a slow start to the harvest in Brazil and restrictions on the amount of sugar Brazilian ports are allowed to export for the 2023/24 crop. The total number of ships waiting to load sugar in Brazilian ports stood at 79 in the week ending May 10, with the loading of 3.605MMT of sugar scheduled. The 2023/24 harvest (December–November) in Thailand is expected to be the second worst in the last 14 years, close to the 2009/10 season, totaling 74MMT. However, on May 11, sugar futures had a large decline of 2.40% to 26.02 cents/lb as a result of the Centre-South of Brazil's sugarcane crushing in the second half of April reaching 988.97K MT, an increase of 5.85% from the same period in the 2022/23 season. Sugar futures ended the week on an upward trend by increasing to 26.22 cents/lb on Friday, May 12 due to global supply concerns.
According to the Food Price Index of the FAO, the global sugar price increased 17.6% MoM in April due to a decrease in production and export supply from global leaders India, China, Thailand, and the EU. Sugar prices are expected to remain high on concerns that shifting weather patterns could undercut global sugar production. Another bullish factor is the diversion of sugarcane toward ethanol production away from sugar supplies, which has been encouraged by the decision by the Organization of Petroleum Exporting Countries (OPEC) to reduce oil output by 1.16M barrels per day. In the 2023/24 season, Brazil's Centre-South region anticipates a 3.2% decrease in sugar production compared to the 2022/23 season at 37.1MMT, which is still 14% above the five-year average. Heavy rains caused sugarcane processing to decline 12.5% YoY to 21MMT in the second half of April, compared to 24MMT in 2022. Despite that, South-central Brazil's sugar output increased by 5.85% to 989K MT in the second half of April as mills used more cane for producing sweeteners. Brazil exported 434.04K MT of sugar and molasses for USD 87.78M during the first week of May. Overall, in 2023, the rain in January and February is expected to increase Brazil's sugarcane production by 6.5% YoY to 666.5 MMT.
Despite predictions that the El Nino phenomenon will have an impact on sugar production, particularly sugarcane plants under 6 months old, Indonesian sugar production is forecast to increase in 2023, reaching 2.4–2.6 MMT, reducing dependency on imports. The National Federation of Cooperative Sugar Factories (NFCSF) revised the Indian sugar production estimate down to 32.7MMT in the ongoing 2022/23 marketing year ending September from its earlier estimate of 35.5MMT, due to irregular rainfall in India's leading sugar-producing states including Uttar Pradesh, Maharashtra, and Karnataka. Lastly, in Khuzestan, Iran, more than 977K MT of sugar beet is expected to be harvested in 2023, with an average yield of 60MT/hectare.
