Sugar Prices Slip on Lower Crude Oil Prices

March NY world sugar #11 (SBH23) on Wednesday closed down -0.19 (-0.96%), and March London white sugar #5 (SWH23) closed down -2.30 (-0.43%).

Sugar prices on Wednesday closed moderately lower, with NY sugar posting a 1-1/2 week low.  Sugar was under pressure Wednesday from a slump of more than -3% in crude oil prices.  Weaker crude prices undercut ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward sugar production rather than ethanol, thu sboosting sugar supplies.

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 late November 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 after the Indian Sugar Mills Association last week said that India's sugar production from Oct 1 to Nov 15 fell by -4.3% y/y.

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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