Sugar Prices Mixed on Possible Delay of Thailand's Sugar Cane Crush

March NY world sugar #11 (SBH23) on Tuesday closed down -0.12 (-0.60%), and March London white sugar #5 (SWH23) closed up +1.40 (+0.26%).

Sugar prices on Tuesday settled mixed.  Sugar prices garnered support Tuesday after the Thai Sugar Milliers Corp said Thailand might push back the start of this year's sugar cane crushing season to early December from Nov 23 and cut its 2022/23 Thailand sugar cane output estimate to 105 MMT from 110 MMT, citing unfavorable weather conditions.  

A bearish factor for sugar was Monday's forecast from Czarnikow that Brazil's Center-South mills would produce 34.7 million metric tons of sugar in 2023-24 (Apr/Mar), up +7% y/y and the highest in three years.

Sugar prices also saw pressure Monday after the Organization of Cane Producers Association in Brazil forecasted Brazil's sugar output in 2022/23 at 36.9 million metric tons due to favorable weather and that production would reach 37.2 million metric tons in 2023/24.

Sugar prices continue to have support from concern about Asian sugar supplies after recent news that some Indian sugar mills reneged on contracts, forcing buyers to cover positions in the cash market.  In addition, the Indian Sugar Mills Association said last week that India's sugar production from Oct 1 to Nov 15 fell by -4.3% y/y, suggesting disruptions in production.  Sugar prices last week also saw support from reports that rain in Thailand has delayed the harvest by up to two weeks.

Unica recently reported that Brazil's Center-South sugar output in the 2022/23 marketing year through October was down -3.1% y/y at 30.281 MMT.

Higher sugar output in India is bearish for prices.  On Oct 24, the Indian Sugar Mills Association forecasted that India's 2022/23 sugar production (Oct 1-Sep 30) would climb +2% y/y to 36.5 MMT as Indian farmers boosted their planted cane acreage by +5.4% y/y to 5.6 mln hectares.  In 2021/22, India's sugar production rose +2.9% y/y to 35.8 MMT.  India is the world's second-largest sugar producer.  Also, robust sugar exports from India are bearish for prices after India 2021/22 sugar exports jumped +57% y/y to a record 11 MMT.

In a bearish factor, the International Sugar Organization (ISO) last Tuesday projected that global 2022/23 sugar production would climb +5.5% y/y to a record high of 182.1 MMT.  Also, ISO projected that the 2022/23 global sugar market would be in a surplus of +6.2 MMT.
 

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