Global
Additionally, there is hope for a rebound in Chinese demand, which raises the cost of all energy products. On ICE Futures New York, all lots of raw sugar closed higher. The price of the March/23 contract rose by 20 points to 19.68cents/lb. On the other side, the May/23 contract saw a rise of 16 points, trading at 18.51cents/lb. In London, ICE Futures Europe saw a rise in white sugar as well. The March/23 contract was up USD 3.50, trading at USD 540.60/MT, whereas the May/23 contract had a gain of USD 3.20 and traded at USD 526.70/MT.
In Brazil, the mills agreed on a price of USD 26.64/50kg bag of crystal sugar. Prices for crystal sugar increased by a good 1.16% compared to the previous day, according to data from USP's Cepea/Esalq Indicator.
Raw Sugar Futures Prices Rise on ICE Due to Rains in the Center-South, Brazil
On Wednesday, December 7th, ICE raw sugar futures closed higher, which was attributed to delays in the sugarcane harvest in the Center-South brought on by recent rains. Raw sugar for March 2023 increased by 0.5%, or 0.09 cents, to 19.48cents/lb. Since the rainy season makes harvesting operations challenging and ineffective, most Brazilian mills are stopping cane crushing for the year, leaving millions of tonnes of raw material in the fields to be gathered next year. Despite the difficulties facing the current crop, traders predicted that the rains would be good for the crop the following year. The price of white sugar for March 2023 increased by USD 2.20, or 0.4%, to USD 537.10/MT.
Raw Sugar Price Rises Amid Supply Concerns in India and Brazil
Raw sugar futures traded on ICE rose on December 5, amid concerns over the supply forecast at major producers Brazil and India and an improvement easing restrictions related to the fight against covid-19 in China. The March expiring raw sugar contract closed higher by 0.7%, or 0.07 cents, at 19.55 cents/lb. Futures reached a two-week high during the session, but gains were later restrained by an increase in the dollar and a decline in oil prices. The news that India, the second-largest exporter of sugar after Brazil, expects its output to fall by 7% this season as a result of unpredictable weather patterns was referenced by traders.
In addition, they pointed out that India might only export 1MMT more sugar than its present quota, bringing the total to 7MMT. Meanwhile, traders report that the harvest of sugar in Thailand has been put off and that Brazil's prolonged rains will probably slow down the cane crop. As a result, data indicated that for the week ending Nov. 29, ICE raw sugar speculators decreased their net long position by 6,424 contracts to 115,079 contracts. In response, the price of the March white sugar contract increased by USD 6.20, or 1.2%, to USD 539.10/MT.
Global Sugar Prices Start the Week High on News of Crop Failure in India
With the announcement that India, the second-largest producer of the commodity in the world, may see a decline of up to 7% in expected production for the current season, lowering its prospects for export, sugar prices started W49 on a high on global exchanges. Raw sugar with a March 2023 maturity was contracted in New York yesterday at 19.55 cents/lb, an increase of 7 points from pricing on Friday, December 2. The May/23 screen increased 10 points to 18.43cents/lb.
In London, at ICE Futures Europe, Monday saw high trading volumes for all lots of white sugar. The March/23 maturity was negotiated at USD 539.10/MT, an increase of USD 6.20. On the other hand, the May/23 maturity, which increased by USD 3.60, contracted at USD 525.40/MT. The other contracts rose between USD 2.800-4.50.
According to Reuters, based on production figures from India, the crop was similar to that in 2021/22, but once harvesting started, they realised that the productivity was really low in the district of Maharashtra, the nation's largest sugar-producing state. The Cepea/Esalq Indicator from USP showed a rise in crystal sugar prices on December 5 in Brazil. The price of the 50-kilogram bag increased by 0.25% to USD 26.29 from USD 26.22 on Friday.
United States
In W49, Raw Sugar Prices on Ice Fell
March raw sugar prices decreased by 0.4%, or 0.08 cents, to 19.60 cents/lb. However, the contract increased 0.6% in W49, marking the second straight week of gains. Rains in Brazil have helped the market and are likely to leave millions of tonnes of cane in the fields for harvest the following year. The organisation Unica, which represents the mills in Brazil, will publish the output report for the center-south region for the second half of November on Monday. White sugar increased by USD 0.80, or 0.1%, to USD 541.40/MT in March.
On the Ice Exchange, Sugar Rises in Price, and Coffee Becomes Cheaper
From November 25 to December 2, various scenarios played out in relation to the coffee, sugar, and cocoa quote positions on the ICE exchange. Coffee prices have fallen over W49, while sugar prices have risen by 0.78%, from USD 0.1933/lb to USD 0.1948/lb.
Brazil
Brazil Mills Seen Ending Sugar Season as Rains Hurt Harvest Operations
Since the rainy season makes cane harvesting challenging and ineffective, most mills in Brazil's main centre-south sugarcane region are stopping cane crushing for the year and leaving millions of tonnes of cane in the fields for the following season. Despite earlier predictions that mills would operate longer into December in an effort to crush available cane and profit from high benchmark sugar prices, analysts and brokers now believe the Brazilian sugar season has basically ended.
Brazil Can Benefit From Sugar Supply Crisis in Europe
Food manufacturers are paying a high price to secure the supply of sugar as Europe struggles with a shortage after this year's domestic harvests were severely hampered by a heat wave. The possibility of certain manufacturers going out of business has grown, according to the European Sugar Consumers Association, as they are paying far more than usual to obtain sugar in the short term. In order to promote shipments of refined sugar, the group wants the European Union to temporarily suspend import taxes. Europe might purchase goods from Caribbean and African nations whose shipments have decreased recently but may suddenly be more appealing given present costs in order to ease the situation. According to an assessment by the European Union, production should decrease by 7% this crop year, to 15.5MMT, after the heat and dry weather harmed crops. Planting has dropped 20% over the past five years.
An alternative for Europe would be to import from Brazil and India, the two largest exporters. While increased ethanol prices have encouraged Brazilian mills to divert more cane to European nations, India has set export limitations.
Sugar Suffers a Slight Decrease Due to the Influence of Oil and Gasoline Prices in W49
On international exchanges, sugar futures contracts ended this Tuesday, December 6, with a slight decline. Among the factors contributing to the variation are the drop in oil prices, Petrobras' cutting of gasoline prices, and a decrease in energy prices, which decreased the desire for Brazilian mills to create ethanol and increased sugar production. All raw sugar in New York closed with lower prices on ICE Futures New York. The price for the March/23 contract fell 16 points to trade at 19.39 cents/lb. On the other hand, the May/23 contract, which was trading at 18.28 cents/lb, experienced a negative variation of 15 points. London White Sugar contracts remain mixed. For the March/23 contract, trade was at USD 534.90/MT, down by USD 4.20. The May/23 contract registered a drop of USD 2.90, to USD 522.60/MT.
Sugarcane Sector Exported USD 312M Between January and October 2022
According to the Ministry of Agriculture, Livestock, and Supply (MAPA), Mato Grosso do Sul exported 675MMT of sugar-energy products worth USD 312M between January and October 2022. The amount equals 4.69% of the state's total agricultural exports. Raw sugar accounted for 72.7% of total exports, or USD 227M. Following that are refined sugar at 4.9% and ethyl alcohol at 22.3%. With a 17.9% export share, the Netherlands was the primary destination, followed by Canada with 11.7%. Georgia, with 11.5%, came in third.
India is now forecasting lower cane and sugar production. As a result, the Brazilian sugar market has been confused since Monday morning, December 5, by the information about supplies from India, attempting to put upward pressure on a global scenario that confirms better supply. The New York futures are already losing the support seen previously, of more than 1%, and are now at more than 0.90%, or 19.66 c/lp.
Brazilian producers have only recently discovered that the 22/23 India harvest will experience a 7% decrease in output due to lower sugarcane productivity, which is due to heat in the summer followed by excessive rainfall. The Indians seize the opportunity to try to hold prices, knowing that the next Brazilian harvest will be good and that the Center-South mills are delivering more commodities at the end of the current one.
Stonex Forecasts the Crushing of 587.6MMT of Sugarcane in the 2023/24 Harvest
The Center-South region of Brazil is expected to crush 587.6MMT of sugarcane during the harvest in 2023/24. This is due to the high volume of rainfall observed in recent months in 2022, resulting in an increase in the estimate of total sugar cane harvest per hectare (TCH) for the 2023/24 crop compared to that released in September, representing an increase of 5.4% YoY. The initial estimate also predicted the average productivity of sugarcane fields in the area would rise 5% YoY, reaching a level of 76.1MT/ha in 2023/24. In line with the crop of 2022/23, StoneX predicts that 45.5% of the total cane for crushing will be used for sugar in 2023/24.Thus, sugar production in the Center-South in 2023/24 was forecast at 35.6MMT up 5% from the previous cycle. The production of sugarcane ethanol in 2023/24 was forecast at 26.3B liters, an increase of 5.2% YoY.
India
Sugarcane Production Likely to Fall and India May Export Less Sugar
Due to unpredictable weather that has decreased the productivity of cane fields, sugar production in India is predicted to decrease by 7% in the 2022/23 harvest. This could reduce sugar exports from India, the world's second-largest exporter, raise global prices, and free up more shipments from rivals Brazil and Thailand.The largest sugar producer in India, Jagtap, in the state of Maharashtra, harvested 530MT of cane from its nine acres in 2022, down from 950MT in 2021. The crop was affected by prolonged dry weather in the summer and subsequent heavy rains, which resulted in a decrease in harvest. On average, farmers reported a 15% drop in cane yields, but in some pockets they said the loss per hectare would be 35%.
Initially, Maharashtra sugar production was estimated at a record 13.8 MMT for the current season, however, a 15% drop in cane output could drop sugar production to 11.7MMT. A similar situation was also observed in Karnataka, which experienced unfavourable weather conditions. As a result, India's total sugar production in 2022/23 is expected to decline to 33.3MMT from 35.8MMT in 2021/22.
China
How Is COVID-19 Affecting Sugar Consumption in China
On November 11, 2022, the Chinese Central Government established 20 measures to enhance the control of COVID-19. According to a recent survey, there were more than 3,000 meters' worth of trucks backed up on a highway in Shanxi province because the exit was blocked by COVID regulations. Because the disruption in logistics prevents them from selling their crops, farmers in Henan, Shandong, and Anhui are destroying them. The Chinese New Year, which falls on January 22 in 2023, is often when sugar consumption peaks. Sales of confectionery increase by 30% during this time as individuals bring gifts to visit family and friends. However, it is possible that the Spring Festival won't be as active this year. The reason is that some sugar mills had to halt the 2022/23 cane production because of the recent pandemic outbreak in Guangxi.
Despite that, the campaign is well organised overall, and the impact is minimal. This indicates that the market will soon receive new crop sugar, perhaps as soon as 2MMT in December. The COVID lockdown had little to no effect on how sugar refineries were run. The local market appears to be adequately supplied as a significant amount of raw materials arrived in Q4 of 22.
Poland
Poland Sugar Prices Increased in October Due to Increased Demand
In October 2022, the price of packaged sugar was around USD 0.87/kg (including VAT), which was 8% higher MoM. A total of 29.87MMT were sold in October, representing a 20.4% decrease MoM. Simultaneously, the decreased demand for sugar from the food industry resulted in an increase in the price of bagged sugar. The selling price of bagged sugar producers in October 2022 was USD 0.76/kg (including VAT), which is 33.6% higher MoM. Monthly sales totaled 21.9MMT representing a 20% decrease MoM.
Russia
In the Stavropol Region of Russia, a Large Crop of Beets Was Harvested
Sugar beet harvesting in the Stavropol Territory has concluded, with a record harvest in the last five years. A total of 2MMT of root crops have been harvested, representing a 10% increase YoY. Domestic sugar beet growers crossed the 2MMT mark twice, at 2.2MMT in 2017 and 2.4MMT in 2016. The quality of the region's industrial crop was rated as good with beet sugar content og 16.5%, which is 3% higher YoY. Beets were harvested at a rate of 6.38MT/ha on average. This is the second best result in the region's agro-industrial complex's history.
Egypt
Sokhna Port Receives 61,000MT of Sugar From Brazil
On December 9, the port of Sokhna received about 61,000MT of sugar from Brazil. Following a USD 12.14/MT decline in the commodity's purchasing value during yesterday's trading, sugar prices among wholesalers and consumers were stable today, on Friday. When there was a shortage of supply and an import crisis two months ago, the commodity experienced repeated back-to-back surges as the tonne exceeded the threshold of USD 647.29/MT. Regarding the international markets, raw sugar futures contracts on the New York Stock Exchange and white sugar futures contracts on the London Stock Exchange both saw price increases during the early trading session of today, Friday.
