In W26 in the sugar landscape, sugar futures prices experienced a slight decrease on both the New York and London stock exchanges. On Monday, June 26, the July/23 contract fell by 0.21% to 24.24 cents/lb, primarily due to the progress of the 2023/24 crop in the Center-South of Brazil. The following day, June 27, sugar futures for the July/23 contract dropped by 2.54% and were quoted at 23.06 cents/lb, reaching the lowest levels in nearly three months on the New York stock exchange. On Wednesday, June 28, sugar futures continued to decline.
In south-central Brazil, sugar production in the first half of June was affected by rains, leading to expectations of lower production compared to the previous fortnight. According to Unica, sugar production is expected to decrease to 2.54 million mt in the fortnight, a decrease from the nearly 3 million mt produced in the previous 15 days. This is attributed to the rains in the first part of June which hampered crushing operations, resulting in a slower production pace. Russia has extended restrictions on the export of white sugar and raw sugar outside the Eurasian Economic Union (EAEU) under export agreements for the new agricultural year, which will run from August 1, 2023, to July 31, 2024, with the permissible total volume of export of white sugar and raw sugar outside the EAEU within 1 mt. Meanwhile, Moldova withdrew from the international sugar agreement concluded in Geneva in 1992 in a decision made on Wednesday, June 28.
The Indian government has approved an increase in the minimum price that sugar mills must pay to cane farmers starting October 1, ensuring better returns for the farmers. The new minimum price will be set at USD 3.84/100kg, up from USD 3.70/kg in 2022. Lastly, Kenya is increasingly dependent on costly sugar imports from neighboring Uganda due to export restrictions imposed by India. In May, 68% of the 21,887 mt of table sugar imported by Kenya came from Uganda, while shipments from India, which was the primary source in the previous month, declined to 24%. As a result of diminishing cane supplies in Kenyan farms, the price of a two-kilogram packet of sugar remains high, above USD 2.98, compared to an average of USD 1.99 in March, contributing to a shortage and sustained elevated consumer prices.
