In W23 in the sugar landscape, on Monday June 5, sugar futures fell 1.33% to 24.40 cents/lb on the New York Stock Exchange following the favourable outlook for the 2023/24 harvest in the Center-South of Brazil and improved weather conditions in Asia. On Tuesday, June 6, sugar futures rose 0.74% to 24.58 cents/lb after falling to six-and-a-half-week lows. This is attributed to optimism surrounding the 2023/24 crop in the Center-South of Brazil and advancements in crushing. However, following the advance of the crop in the Center-South of Brazil in the month of May, sugar futures decreased by 0.33% to 24.50 cents/lb on Wednesday, June 7. On Thursday, June 8, the price was up 0.86% at 25.48 cents/lb, influenced by the monsoon rains that finally hit India, the world's second-largest sugar producer.
According to the FAO, global sugar prices were up 5.5% MoM in May to an average of 157.6 points, which indicates the fourth consecutive monthly gain and brings the index to 30.9% above its value a year ago. This is due to the growing concern about the possible influence on the 2023/24 harvests of the evolution of the El Niño phenomenon. This added to shipment delays amid intense competition from soybeans and corn in Brazil. According to the USDA, global sugar production in 2023/24 is expected to increase by 6% to 187.7 million mt, driven by increased production in Brazil, India, and other producing countries. For the EU, the USDA foresees an increase of 576,000mt in the 2023/24 season compared to the current 2022/23 season. Meanwhile, global sugar consumption is expected to break a new record and reach slightly above 180 million mt in 2023/24, reducing the final stock of the campaign. Domestic consumption in the EU would stay stable, and imports would decrease to 2.5 million mt from 3 million mt in 2022/23 due to increased supply.
Indonesia aims to boost its white sugar production by 8.3% YoY to 2.6 million mt in 2023, according to Bapanas. Indonesia presently consumes 3.4 million mt of sugar annually. Additionally, from early 2022 to W23, the price of consumer sugar in Indonesia continued to increase to a high level of USD 0.97-1.04/kg. The primary reason is a decline in sugar exports to Indonesia. According to Bapanas, 2023's sugar import target of 900 thousand mt will not be reached. In fact, the realisation will likely not even reach 30% of the target due to soaring international prices. Additionally, it is uncertain whether Brazil, Thailand, and India will export in the upcoming year. In Bangladesh, the government raised cooking oil and sugar's annual import ceiling to USD 5 million without any letter of credit (LC) against the existing ceiling of USD 0.5 million.
The Cabinet of Ministers' export ban on Ukrainian sugar prevents producers from carrying out previously signed contracts and deprives them of foreign cash revenues. According to experts, despite a decline in consumption following the outbreak of the full-fledged war, there will be no sugar shortage in Ukraine. This is because farmers produced significant amounts of sugar in 2022 under the prospect of possible occupation. Following the suspension of exports from Ukraine, Romania anticipates a scarcity of sugar. Additionally, Romania's sugar beet production fell by 64%, and the area was down 54% YoY in 2022. There are currently only two sugar factories operating in Romania, which barely cover 35% of the sugar needed for domestic consumption. Lastly, Kenya's government has dropped plans to privatise state-owned sugar firms in the country amid sustained opposition to the proposal by leaders and sugarcane farmers from the sugar belt region.
