World: Sugar’s rally to a six-year high on borrowed time as glut looms
Sugar
Published Feb 8, 2023
Tridge summary
(Feb 7): The world should end this season with its first sugar surplus in four years, but you wouldn’t know it from how prices have surged. Futures hit a six-year high last week, threatening more inflationary pain by increasing the cost of making baked goods, candy and soft drinks. While top exporter Brazil is set to collect a much bigger crop, those supplies won’t arrive until harvesting starts around April — and right now the market is tightening.
Original content
That’s because weaker output will likely force India to cap exports, while European production has been hit by drought and now faces uncertainty after a pesticide ban. Plus, Indian mills are diverting more cane to make ethanol and China’s reopening could lift demand. There are already signs that sugar’s rally is feeding through to higher retail prices for goods in grocery stores in the US and Europe. “The biggest concern is stocks are tight globally,” said Rahil Shaikh, managing director of trader Meir Commodities India Pvt. “As of now the curtains are down on additional Indian exports. If there is any shock from Brazil then the world market will be on fire.” Here’s what’s happening in the market: How much the No 2 grower will export has been a key question. The Indian Sugar Mills Association last week cut its shipment outlook to about six million tons for this season after bad weather hurt yields, indicating the government is unlikely to allow extra volumes. Plus, India’s push to ...
By clicking “Accept Cookies,” I agree to provide cookies for statistical and personalized preference purposes.
To learn more about our cookies, please read our Privacy Policy.