In W36 in the sugar landscape, on Tuesday, September 5, sugar futures for the Oct-23 contract surged by 3.25% to USD 0.2665 per pound (lb), reaching 12-year highs due to concerns about supply shortages in Asia caused by insufficient rainfall. Brazil's production became crucial for the global market as dry weather threatened sugar production in India and Thailand. On Wednesday, September 6, sugar futures fell sharply by 1.61% to USD 0.2622/lb as profit-taking pressured prices. Prices rebounded slightly on Thursday, September 7, rising by 0.40% to USD 0.266/lb due to concerns about diminishing supply prospects in India that might discourage exports. Finally, on Friday, September 8, prices declined by 1.39% to USD 0.2631/lb as profit-taking weighed on the market despite continued attention to weather conditions in Asia.
Indian sugar prices have surged by over 3% in two weeks, reaching a six-year high of USD 454.80 per metric ton (mt) on Tuesday due to limited rainfall in key growing regions and concerns about next season's production. This increase could contribute to food inflation and potentially lead New Delhi to restrict sugar exports, supporting global prices, which are currently at their highest level in over a decade. India's sugar production is expected to significantly drop by 3.3% to 31.7 million metric tons (mmt) in the new season starting on October 1 due to reduced cane yields in Maharashtra and Karnataka, which make up more than half of India's total sugar production. Consequently, sugar mills are reluctant to sell sugar at lower prices.
In the 2023/24 harvest, Brazil is projected to process 629 mmt of sugarcane, with an anticipated sugar production of 40.3 mmt. Meanwhile, Ukraine expects a robust sugar beet harvest in 2023 and a significant sugar production surplus, enabling the export of at least 600 thousand mt of sugar. Favorable weather conditions are expected to yield around 13 mmt of sugar beets from approximately 250 thousand hectares (ha). In the 2023 season, 30 sugar factories will be involved in processing sugar beets to achieve these results.
In Cần Thơ, Vietnam, the retail prices of various sugar types have increased, with yellow granulated, fine granulated white, and large granular white sugar in loose form ranging from USD 1.03 per kilogram (kg) to USD 1.07/kg. Meanwhile, pre-packaged yellow and white sugars with branded packaging prices stood at USD 1.07/kg to USD 1.40/kg. Some organic and diet sugar products are priced even higher, at USD 3.31/kg to USD 4.13/kg. This price increase can be attributed to rising imported sugar and sugarcane costs.
Similarly, Myanmar is grappling with high sugar prices due to a decrease in domestic sugar stocks, which currently stand at only about 100 thousand mt. White sugar prices in the Yangon market have increased significantly from a range of USD 1.52 to USD 1.57 per tug to range between USD 1.71 to USD 1.74 per tug. Additionally, for the upcoming 2023/24 sugarcane crushing season, sugar mills are offering a purchase price of USD 47.64/mt to encourage sugarcane delivery to the factories.
Lastly, Australia has resumed its duty-free export of raw sugar to the United Kingdom (UK) for the first time in 50 years. This development comes as the first shipment of Queensland sugar under the Australia-UK Free Trade Agreement arrived in London. Furthermore, the duty-free quota expanded from 80 thousand mt in the first year to 220 thousand mt by Oct-30. After that, all tariffs will be eliminated, providing a significant opportunity for Queensland's sugar industry.