March NY world sugar #11 (SBH23) on Tuesday closed down -0.34 (-1.70%), and March London white sugar #5 (SWH23) closed down -6.90 (-1.24%).
Sugar prices Tuesday extended last Friday's losses, with NY sugar falling to a 2-1/2 week low and London sugar falling to a 2-week low. Â Sugar prices were undercut by Monday's -1.6% sell-off in the Brazilian real (^USDBRL) to a 1-1/2 month low against the dollar. Â A weaker real encourages export selling by Brazil's sugar producers.
Another bearish factor for sugar prices is an improved sugar supply outlook. Â Last Tuesday, Conab hiked its Brazil 2022/23 sugar production estimate to 36.4 MMT from an Aug estimate of 33.9 MMT. Â Also, the India Sugar Mills Association (ISMA) on Dec 19 reported that India's Oct-Dec 15 sugar production rose +5.4% y/y to 8.21 MMT. Â India is the world's second-largest sugar exporter.
Higher sugar output in India is bearish for prices. Â On Oct 24, the ISMA 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. Â In 2021/22, India's sugar production rose +2.9% y/y to 35.8 MMT. Â 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 bullish factor, StoneX Financial said Dec 14 that due to a delay in Thailand's sugar harvest, projections for Thai sugar exports of 1 MMT to 2 MMT this quarter "will not materialize." Â Also, India's Sugar Mills Association (ISMA) said that it sees India's sugar mills diverting 4.5 MMT to 5.0 MMT of sugar to ethanol production in 2022/23.
Reduced sugar production in Europe is another supportive factor for prices, as that may force European sugar and food manufacturers to import sugar, leading to tighter global supplies. Â The European Association of Sugar Manufacturers on Dec 8 forecasted that EU 2022/23 sugar output would fall -7% y/y to 15.5 MMT.
In a bearish factor, the International Sugar Organization (ISO) on Nov 22 projected that global 2022/23 sugar production would climb +5.5% y/y to a record high of 182.1 MMT. Â Also, ISO projected that the 2022/23 global sugar market would be in a surplus of +6.2 MMT.
Â
More Sugar News from Barchart
- Arabica Coffee Falls Back on Heavy Rain in Brazil
- Arabica Coffee Slips as Dryness Concerns Ease in Brazil
- Coffee Prices Retreat on Ample Global Supplies
- Sugar Prices Decline on an Improved Sugar Supply Outlook
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
/Cybersecurity%20by%20AIBooth%20via%20Shutterstock.jpg)
