In W46 in the sugar landscape, on Friday, November 17, the sugar futures market saw a slight rise on the New York and London Stock Exchanges. The most traded raw sugar maturity on the New York Stock Exchange (ICE Futures US) increased by 0.04%, reaching USD 0.27 per pound (lb). In London, the main maturity was raised by 0.20% and traded at USD 735.20 per metric ton (mt).
According to the Food and Agriculture Organization of the United Nations (FAO), global sugar production in the 2022/23 season is expected to decrease by 2% compared to the previous season, resulting in a loss of approximately 3.5 million metric tons (mmt). India and Thailand, the world's second- and third-largest sugar exporters, have been severely affected by the extremely dry weather caused by El Niño, which led to a tight supply and price surge globally. India's Sugar Mills Association predicts an 8% drop in sugar production, while the United States Department of Agriculture (USDA) forecasts a 15% drop in Thailand's production. The good news is that Brazil, the world's largest sugar exporter, expects a 20% YoY growth due to favorable weather earlier this year. However, the global supply will not increase until Mar-24 since Brazil is in the Southern Hemisphere and will only cover the gaps in the second half of 2024.
Moreover, the price increase has negatively affected sugar consumption globally and raised concerns regarding food security, particularly in developing countries, which are already struggling with food storage caused by the Russia-Ukraine war, weak currency, and inflations.
In W46, Thailand's refined sugar market returned to normal with a sufficient supply. In W44, the Thailand cabinet approved a cap on the ex-factory prices for refined sugar increased by USD 0.056 per kilogram (THB 2/kg), which caused a temporarily tight supply. As a response, the Thailand government established a hotline to monitor the domestic market. The sellers can contact the Internal Trade Office if they encounter a sugar shortage, and the Cane and Sugar Board will ask sugar factories for immediate delivery.
The annual production of refined sugar in Thailand amounts to approximately 8 mmt, of which 2.5 mmt are consumed domestically. The remaining quantity is exported to other countries. The recent price rise in the global market will significantly affect domestic markets.