MUMBAI, 25 Jun (Commoditiescontrol): ICE Sugar prices saw moderate gains on Monday, with New York sugar reaching a one-week high and London sugar climbing to a six-week high. The price surge is attributed to the likely continuation of India's export restrictions, as the Indian government announced there is no plan to review these restrictions. Additionally, below-normal monsoon rains in India have further bolstered sugar prices. The Indian Meteorological Department reported that India received 64.5 mm of rain in the first 18 days of June, compared to the long-term average of 80.6 mm.
On Monday, the July raw sugar contract increased by 0.44 cents, or 2.32%, closing at 19.87 cents per pound, after rising 2.26% the previous week. Similarly, the August ICE white sugar contract in London gained $11.90, or 2.13%, settling at $574.00 per metric ton, following a 1.6% gain last week.
Recent market movements also reflect the International Sugar Organization’s (ISO) revised global sugar deficit forecast for 2023/24, now projected at 2.95 million metric tons, up from the previous estimate of 689,000 metric tons. The ISO has also increased its global sugar demand forecast to 182.2 million metric tons (MMT), driven by higher consumption in India.
In Brazil, sugar producer Tereos announced on Monday that it expects to crush a similar amount of sugarcane in the 2024/25 harvest as in the previous cycle, despite a drought in key production areas. The dry weather has accelerated the harvest, maintaining Brazil's overall sugar production outlook stable, despite some mills underperforming.
Meanwhile, India’s sugar production has declined by 1.6% year-over-year as of April 30. The delay in monsoon rains is likely to impact planting schedules in key regions. In Australia, temporary suspensions of industrial actions at sugar mills were observed as unions negotiated for better wages, affecting operations at the country's largest sugar producer.
The global sugar market remains volatile, influenced by weather conditions in key production areas such as Brazil and India. Analysts from BMI project a 1.5% increase in global sugar production to 185.7 million tons for the 2024/25 season, with consumption expected to rise by 0.5% to 179.7 million tons. The USDA forecasts record sugar production at 186 million metric tons for 2024/25, with demand projected at 178.8 million tons.
Speculative traders have reduced their net short positions, leading to a short-covering rally. Traders are now closely monitoring technical support levels for the October sugar contract at 19.28 and 18.84 cents, with resistance expected at 19.95 and 19.72 cents.
In summary, global sugar markets continue to experience volatility, driven by production increases in Brazil and weather uncertainties. Analysts anticipate a 1.5% rise in global sugar production for 2024/25, with prices likely to fluctuate due to ongoing market dynamics and weather conditions.
(By Commoditiescontrol Bureau; +91 98201 30172)
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