World Sugar Prices Rose Almost 7% In February, According to the FAO Index (Mar 10)
World sugar prices rose 6.9% in February compared to the previous month, reaching their highest level since February 2017. The rebound was mainly due to the downward revision of the 2022/23 sugar production forecast in India, which moderated the export outlook for the current campaign, according to the FAO. However, the adequate progress of the harvest in Thailand and abundant rainfall in the main production areas of Brazil prevented a higher monthly increase in prices. In addition, the drop in international crude oil prices and ethanol prices in Brazil also contributed to limiting the upward pressure on world sugar prices.
Sugar Prices Close With a Strong Increase (Mar 6)
In New York, on ICE Futures, raw sugar, maturing on May/23, was contracted on Mar 3 at USD 461.21/MT (20.92 cents per pound), an appreciation of 61 points, up 3% in comparison with the price of the Last day. The July/23 screen rose 50 points, trading at USD 446.44/MT (20.25 cts//lb). The other contracts rose between 11 and 36 points. In London, on ICE Futures Europe, Mar 3 was also high for all lots of white sugar. The May/23 maturity was contracted at USD 588.40/MT, an appreciation of USD 15.60, up 2.7% compared to Mar 2 prices. The August/23 canvas rose USD 13.20, trading at USD 575.70/MT. The other contracts rose between USD 6.10 and USD 10.20.
White Crystal Price Starts Month Low in São Paulo (Mar 7)
The average prices of white crystal sugar practiced on the spot market in the state of São Paulo started March on a downward trend. According to data from Cepea, the supply of the best quality crystal (Icumsa up to 180) remained low, but demand did not show signs of heating up. Buyers have programmed themselves for the off-season with sugar contracted in advance and/or through inventories. From February 27th to February 3rd, the average of the CEPEA/ESALQ Indicator was USD 25.07/50kg bag (BRL 131.56), down 0.62% compared to the previous week from USD 25.23/sc (BRL 132.38).
Sugar Exports From Brazil Will Not Increase at the Pace of Production (Mar 8)
Sugar exports from Brazil in 2023/24 are unlikely to grow at the same pace as production, as logistical bottlenecks could limit shipments, with corn, soy, and soy bran competing for space in the Brazilian ports, according to a presentation on Mar 8 at an event promoted by consultancy Datagro. According to figures presented by Raízen trader Ricardo de Aguiar, sugar production in the center-south of Brazil is expected to grow by 3.6M MT in 2023/24, to 37.3M MT, while exports are expected to increase by 1.4M MT compared to the previous harvest, to 26.9M MT. According to the commercial analyst at Usina Aroeira, Gabriela Bosquetti, the maximum sugar export capacity in Santos, the main export hub, amounts to 2.7M MT per month, and disposing of all production from April to December will always require operation in Maximum limit.
Sugar Contracts in the US and UK Show a Significant Increase (Mar 8)
Sugar futures contracts rose significantly on international exchanges. On Mar 7, the negotiations found all the support in the harvest of India, in which some mills are starting to stop grinding sugarcane in the State of Maharashtra. In New York, all raw sugar contracts closed higher on ICE Futures. For the March/23 contract, the increase was 21 points, trading at USD 422.63/MT (19.17 cents per pound). The May/23 contract, on the other hand, had a positive variation of more than 18 points trading at USD 398.15/MT (18.06 cents/lb). White sugar contracts were also valued at ICE Futures Europe in London. In the May/23 contract, trading was USD 588.20/MT, up from USD 7.90. The August/23 contract registered a positive variation of USD 8.10, negotiated at USD 575.00/MT. Domestic market Crystal sugar prices increased slightly by 0.58% compared to the previous day.
Sugar Production in the Center-South Should Jump in a Favorable Year for Brazil (Mar 8)
Sugar production in south-central Brazil was estimated on Mar 8 at 38.3M MT in 2023/24 (April/March), up 13.1% compared to the previous season, estimated the Datagro consultancy, which projects another year of remunerative prices, while competitors in the country are embittered by climate problems and smaller harvests. This increase will take place as the sugarcane harvest in the main producing region of Brazil will grow 6.9%, to 590M MT, and with mills allocating more raw material to the manufacture of the sweetener than seen in the previous cycle, according to the president of Datagro, Plinio Nastari. The "mix" for sugar was estimated at 48% of the cane processed in the center-south, versus 45.6% in the previous season, with mills being attracted by a better remuneration of the sweetener in ethanol.
Return of El Niño Brings Concerns to Sugarcane Fields in Brazil (Mar 9)
The World Meteorological Organization (WMO), a specialized agency of the United Nations (UN) for meteorology, warns of a possible return of the atmospheric phenomenon El Niño, which may occur between April and June of this year. According to the agency, there is a 15% probability that El Niño will return between April and June. The odds rise to 35% between May and July and are 55% from June to August. El Niño causes unusual warming of the waters of the Pacific Ocean in the equatorial part, raising global temperatures. In the last three years, the world has been under the influence of La Niña, which cools the waters of the Pacific in the same region and contributed to temporarily curbing the increase in temperatures on the planet. Analysts are cautious in pointing out possible impacts of El Niño on Brazilian agricultural production since it is still not possible to know the intensity of the phenomenon that may start this year. But based on the occurrence of the weather event in the past, it is possible to get some clues. In the sugarcane culture, the harvest peak in Brazil occurs between April and August. “If there is a strong El Niño, it could lead to a wetter winter. This is bad for the rhythm of the sugar harvest, because, if it rains too much, the mills cannot grind”, explains Lívea Coda, sugar and ethanol analyst at HedgePoint.
Uttar Pradesh to Set New Record in Sugarcane Payments to Farmers (Mar 10)
On March 7, Uttar Pradesh Chief Minister Yogi Adityanath said that the state is all set to create a new record in the country as sugarcane payments totaling more than Rs 2 lakh crore were now reaching farmers' bank accounts via DBT (direct benefit transfer) for the first time. The milestone has been achieved in the six years since the Yogi Adityanath government came to power for the first time in March 2017. According to the sugar industry and cane development minister Chaudhary Laxmi Narayan, USD Rs 65 crore for the current crushing season was transferred to farmers on Mar 6 after which the total dues paid over the last six years crossed the Rs 2 lakh crore mark. The figure had already reached around Rs 1.97 lakh crore last month.
Sugar Futures Close Lower in London and New York (Mar 7)
Sugar futures contracts closed mixed in New York on Mar 6, after touching the maximum on Mar 3. According to analysts interviewed by Reuters, the market felt pressure from the weakness of other agricultural markets. "Traders said the market was weighed down in part by weakness in other agricultural markets and the possibility that funds could start to reduce a large net long position," he said. The first two screens of ICE Futures in New York closed in the red, contracted, respectively, at USD 460.10/MT and USD 445.99/MT (20.87 and 20.23 cents per pound), expiring in May and July/23, down 5 and 2 points. The October/23 display closed stable at USD 439.16/MT (19.92 cents/lb). The other contracts closed at a high of 3 to 11 points. Also according to analysts interviewed by Reuters, the market continued to be supported by the reduced prospects for production in India, with some mills already starting to stop grinding sugarcane in the state of Maharashtra, the largest producer in the world.
Sugar Oscillates Strongly, but Ends the 6th Session Close to Stability in NY, US (Mar 10)
After wide swings, sugar futures closed Mar 10 close to stability in New York, but with a slight drop in London. The market followed the data on the Brazilian harvest and financial data during the last few days. The most traded month of raw sugar on the New York Stock Exchange rose 0.05% to USD 466.50/MT (21.16 cents/lb), with a high of USD 467.82/MT (21.22 cents/lb) and a low of USD 455.47/MT (20.66 cents/lb). In London, the first contract fell 0.41% on the day, at USD 589.90/MT. In the week, the main salary in the North American terminal rose by 1.39%. After registering highs the day before, the sugar market on foreign exchanges began this Mar 10 session in the red. During the day, however, losses were being reduced and New York even recorded a slight appreciation. This week's negotiations permeated information about the production origins. On the one hand, operators followed the positive information about the 2023/24 crop in the Center-South of the country.
Adjustment of Positions and Climate Favor Sugar Prices in Us and EU (Mar 10)
In New York, on ICE Futures, the May/23 contract was contracted at USD 466.28/MT (21.15 cents per pound), an increase of 27 points compared to the prices practiced the day before. The July/23 screen also rose 27 points, trading at USD 453.71/MT (20.58 cents/lb). The other maturities appreciated between 19 and 27 points. In London, ICE Futures Europe for white sugar closed higher on all lots. The May/23 contract was traded at USD 592.30/MT, an appreciation of USD 6.30 compared to Mar 8 prices. The August/23 canvas rose by USD 5.60 and contracted at USD 578.60/MT. The other contracts were valued between USD 5.70 and USD 6.10. On the domestic market, Mar 9 saw a rise in crystal sugar prices measured by the Cepea/Esalq Indicator, from USP. The 50-kilo bag was traded yesterday at USD 25.06 (BRL 131.47) against USD 24.95 (BRL 130.90) the day before, an appreciation of 0.44% comparing the days.
China Cuts Forecast for Sugar Production on 2022/23 Season (Mar 8)
China's Ministry of Agriculture on Mar 8 cut its outlook for the country's sugar output by 7.2% to 9.3M MT, due to unfavorable weather that has affected producing regions in the 2022/23 season.
China’s Sugar Output Seen Lower on Drought in Southwest (Mar 9)
Sugar output in China's top growing region is set to be the lowest in six years, said Australia-based Green Pool Commodities on Mar 9, as it revised down its estimate for production in one of the world's top producers. Green Pool expects output in southwestern Guangxi region to drop to 5.4M MT in the 2022/23 season, it said in a report, down 12% on last year, and the lowest since 5.3M MT in 2016/17. Nationwide production will fall to 9.17M MT, it said, reducing its forecast from last month's estimate of 9.52M MT. "Guangxi's rapid winding down points to dwindling cane supply," said the Green Pool report, referring to a shorter-than-usual harvest. "Local farmers suggested that some cane harvested later in the season has featured considerable drought damage," it added.
Sugar Prices in January (Mar 9)
The price of packaged sugar producers in January 2023 was around USD 1.09/kg (PLN 4.75) (including VAT), 0.1% higher than in the previous month. Within the month, a total of 22.76K MT were sold, down 16.6%. At the same time, the reduced demand for sugar from the food industry translated into an increase in the price of bagged sugar. In January 2023, the selling price of bagged sugar producers was USD 0.93/kg (PLN 4.07) (including VAT), which is 14.8% more than in December. In total, monthly, sales amounted to 18.76K MT, which is a decrease of 16.6%.
In Profit-Taking, Sugar Retreats Sharply on New York in the US and London Stock Exchange in the UK (Mar 6)
Sugar futures operated with a sharp fall on the New York and London stock exchanges Mar 6 morning. The market felt pressure from a profit-taking movement, in addition to oil in the financial sector. Around 7 am (Brasília time), raw sugar was down 1% in the main contract on the New York Stock Exchange (ICE Futures US), at USD 456.58/MT (20.71 cents/lb). In London, the low was 1.43%, at USD 580.00/MT. After closing last week close to USD 462.97/MT (21 cents/lb) amid concerns about the Indian crop due to adverse weather, the sugar market adjusts at the start of a new week. In addition to a natural profit-taking movement, there was pressure associated with the devaluation of oil. The oil oscillations impact the decision of the plants in the Center-South of Brazil in the option of sugar or ethanol.
With the Prospect of an Increase in Brazilian Production, Sugar Prices End on Mar 8 With a Devaluation in New York in the US and London Stock Exchange (Mar 8)
Sugar futures contracts ended on Mar 8 session with slight declines on the New York and London Stock Exchanges. The May/23 raw sugar contract ended with a devaluation of 0.14%, trading at USD 460.32/MT (20.88 cents/lb). The August/23 contract fell by 0.13% and closed at USD 3.87 (BRL 20.31), while the October/23 contract ended at USD 442.25/MT (20.06 cents/lb), with a gain of 0.48%. On the London Stock Exchange, the futures price of the May/23 contract for the white type ended the day with a loss of 2.20% and was quoted at USD 586.00/MT. The August/23 maturity recorded a decrease of 2.00% and was negotiated at USD 557.90/MT. Also according to information from Barchart, sugar prices closed on Mar 8 moderately lower with the prospect of stronger sugar production in Brazil. “Datagro projects that 2023/24 sugar production in the Center-South of Brazil will rise 13.1% YoY to 38.3M MT. In addition, weakness in oil prices weighed on sugar after falling more than 1% today,” he said.
UK Sugar Price Remains High Due to Tight Stocks (Mar 9)
The price for white sugar rose on the London futures market in W9 to its highest level since mid-September 2022 for the first expiring contract. At the beginning of W10, the price was USD 580.30/MT (€ 544). The high price level is partly supported by reports that India will not sell any additional sugar to the world market. But reports about Indian production are mixed. On Mar 3, the Indian Sugar Mills Association (ISMA) announced that Indian production this season through February is 1.8% higher than a year ago in the same period. On the other hand, dozens of factories have already stopped producing sugar earlier than last year, so lower yields are expected. Prices, therefore, remain volatile.
The Beet Crop Is the Key to Achieving 90% Self-Sufficiency in Sugar (Mar 9)
Dr. Ahmed Abu Al-Yazid, Head of Delta Sugar and Professor of Agricultural Economics at Ain Shams University, confirmed that the sugar beet crop is one of the important strategic crops that helped the country reach self-sufficiency in local sugar, at a rate of about 90%. Abu Al-Yazid indicated that Egypt, in the past, relied on the production of sugar from cane only, as approximately 142.8K ha (340K feddans) of cane are cultivated in the governorates of Upper Egypt. Local sugar and its cultivation began to spread as a result of the interest of the political leadership in the last period, and the expansion of the establishment of national projects such as the Future of Egypt project and the 1.5M acres project, in which the cultivation of the sugar beet crop began to spread. Egypt has an area of no less than 630K acres cultivated with the sugar beet crop. The sugar beet crop produces about 12.5M MT of beets, and these quantities produce approximately 1.8M MT of sugar from beets.
Import of Duty Free Food in Kenya to Cushion Drought Effect (Mar 6)
The Kenyan government through the Kenya National Trading Association (KNTA), issued a duty-free exemption code for the importation of the following commodities: 150K MT of rice, 125K MT of cooking oil, 200K MT of sugar, 25K MT of wheat, and 80K MT of beans. This is due to the acute shortage of these commodities caused by the drought experienced in the country.
Sugar Factories Allocated USD 0.04B Under Revolving Schemes (Mar 9)
The process of financing sugar factories under revolving schemes and the situation with the production of domestic sugar were discussed in the Government under the chairmanship of Deputy Prime Minister, Minister of Trade and Integration Serik Zhumangarin. According to First Vice Minister of Trade and Integration Arman Shakkaliyev, currently, 18 regions have provided financing for sugar factories for the purchase and processing of raw sugar for USD 0.040B (18.3B tenge). According to the Ministry of Agriculture, the total daily capacity of sugar factories in Kazakhstan is 8.7K MT for the processing of sugar beets and 2.4K MT for raw cane.