Climate, India and China drive global sugar market

Published Apr 19, 2024

Tridge summary

The Indian government is considering increasing sugar diversion to ethanol production by an additional 800kt for the 23/24 season, which may reduce sugar availability for commercial markets. Despite this, the outlook for the 24/25 sugar harvest in India is positive, with expectations of normal monsoon conditions enhancing productivity. Concurrently, Brazil's sugar production is recovering from drought, influencing global sugar market dynamics. A recent recovery in raw sugar prices was noted, partly due to these considerations. Brazil's record harvest for the 23/24 season and its exports have contributed to stabilizing global sugar prices. Additionally, a country's sweetener production has seen a 10% increase from the previous year, reaching about 9.6 million tons, which could lower the local premium and reduce import reliance. The impact on imports will be assessed with data from the coming months, amidst optimism for India's future harvests and ongoing discussions about ethanol production adjustments.
Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The Indian government is considering diverting another 800kt of sugar to ethanol in the 23/24 season, reducing the potential availability of commercial flow from India. Despite the possible diversion of sugar and the reduction in projected stocks, the outlook for India's 24/25 harvest remains optimistic, with typical weather conditions favoring a bearish market. The main sugar producing regions in Brazil, which are recovering from the drought, have been presenting better levels of precipitation, which should benefit the development of mid- and late-harvest sugarcane, contributing to the continuation of the bearish sentiment. According to Lívea Coda, Sugar and Ethanol analyst at Hedgepoint Global Markets, last week was marked by a slight recovery in raw sugar prices, after the market realized that the Indian government is more inclined to resume the country's ethanol program. to allow any export. “This notion is in line with what we discussed in our previous report, only now it is ...
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