Mumbai, 09 Dec (Commoditiescontrol): Sugar prices ended the week with notable gains, reversing a downward trend from earlier sessions. Concerns over dry weather in Brazil's Center-South region, coupled with ongoing supply constraints, supported a rally in both raw and white sugar markets.
On Friday, March raw sugar futures on ICE climbed 2.88% to 21.81 cents per pound, while London December white sugar futures increased $10.80 to $561.00 per metric ton. This marked a recovery from earlier losses as adverse weather and reduced production projections took center stage.
The market’s weekly performance highlighted its sensitivity to global supply dynamics and weather conditions. After a relatively weaker start to the week, raw sugar futures closed higher, supported by news of Brazil’s declining sugar output and extended export curbs by India. Brazil, the largest global producer, reported a year-on-year production drop of 59.2% for early November, bringing seasonal cumulative production down by 3%. Additionally, prolonged drought and wildfires in São Paulo earlier this year led to further production cuts. Conab, Brazil’s crop forecasting agency, lowered its output forecast for 2024/25 to 44 million metric tons, down from 46 million metric tons.
India also continues to play a crucial role in the global sugar trade. With export restrictions in place since late 2023, the Indian government limited exports to 6.1 million metric tons last season, creating additional upward pressure on international prices. Domestic supply concerns have prompted industry associations to push for increased exports, but weak monsoon rainfall has hampered output. As a result, India’s sugar production is forecast to drop by 11.2% in the coming season.
The global outlook remains mixed. The International Sugar Organization (ISO) revised its global deficit estimate for 2024/25 to 2.51 million metric tons, down from earlier projections. However, a surplus of 1.31 million metric tons is anticipated for 2023/24, reflecting a partial recovery. Adverse weather in Thailand, a significant exporter, is also affecting supply, with production expected to decline 36% to a 17-year low of 7 million metric tons.
From a technical perspective, raw sugar prices remain volatile, finding support at 21.33 cents per pound and facing resistance at 22.07 cents. Market participants are closely monitoring Brazil’s weather, global ethanol trends, and production adjustments in key regions. Despite challenges, the broader outlook suggests continued support for prices driven by ongoing supply constraints and climatic uncertainties.
(By Commoditiescontrol Bureau: 09820130172)
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