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In W31 in the sugar landscape, raw sugar futures on the New York Stock Exchange (NYSE) experienced fluctuations. On Monday, July 31, sugar futures for the Oct-23 contract were up 0.8% to 24.11 cents/lb, rebounding from a 4.4% fall in W30. This rise was attributed to a 1% oil price jump that supports ethanol, potentially prompting global sugar mills to prioritize ethanol over sugar production and reducing sweetener supply. In addition, attention remained on the weather's impact on Asian crops, despite optimism in Brazil's Center-South region. Notably, sugar production surged by 8.86% year-on-year (YoY) to 3.24 million metric tons (mmt) in early July. Similarly, on August 1, sugar futures rose by 1.16% to 24.39 cents/lb.

However, on August 2, a 0.78% drop to 24.20 cents/lb occurred due to financial pressure, combined with oil losses of nearly 2% and exchange rate effects. The optimism surrounding the 2023/24 crop in Brazil's Center-South contributed to this decline, alongside improving weather conditions in Brazil, India, Thailand, China, and even Europe. Subsequent days saw further decreases, with a 0.74% drop on Thursday to 24.02 cents/lb and a significant 1.37% drop on Friday to 23.69 cents/lb.

The European Union's (EU) sugar production in 2023/24 is expected to increase by more than 6% from the previous season, with a sharp increase in sugar beet acreage in Poland, offsetting declines in France and Germany. Despite the increase, ending stocks are projected to remain tight due to declining imports and reduced exports. Notably, EU sugar imports forecast for 2023/24 will decrease to 2.65 mmt from 3.15 mmt in 2022/23. Conversely, EU sugar exports are anticipated to rebound, reaching 1.35 mmt in 2023/24.

India's sugar production for the upcoming 2023/24 season, starting in Oct-23, is projected to decrease by 3.41% to 31.68 mmt. This reduction is expected primarily in the key sugarcane-growing states of Maharashtra and Karnataka, which together contribute over half of India's total sugar output. These states encountered significantly lower rainfall, up to 39% below average, during the monsoon. In addition, the shortfall in production is compounded by the increasing diversion of sugarcane for ethanol production, with mills estimated to use 4.5 mmt of sugar for ethanol. Despite this, sugar production for the season is still projected to exceed domestic consumption of 27.5 mmt, leaving a surplus of 4.2 mmt at the end of the season.

In contrast, Brazil is undergoing a record sugarcane harvest, potentially leading to exports surpassing previous years' figures. Brazil's July sugar and molasses exports reached 2.98 mmt, a 3.5% YoY increase, although lower than June's 3.08 mmt. Revenue was 30% higher YoY, with USD 1.494 billion generated in July, compared to USD 1.150 billion in Jul-22. Moreover, Brazil has already sold the entire sugar production of the 2022/2023 harvest, and it is estimated that 40% of the next harvest, 2023/2024, has already been sold. This high demand has reflected positively on prices, resulting in an average of USD 73/mt in 2023, compared to USD 290/mt in 2019.

Lastly, Russia has harvested 212 thousand mt of sugar beets and yielded 11.7 thousand mt of beet sugar by the end of July. Anticipated beet sugar production in Russia for August is set to reach 400 thousand mt, supplemented by an additional 20 thousand mt from imported raw sugar.

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