May NY world sugar #11 (SBK23) on Monday closed down -0.05 (-0.24%), and May London white sugar #5 (SWK23) closed down -8.10 (-1.38%).
Sugar prices Monday moved lower on the prospects of additional sugar exports from India. Â Indian Food Minister Singh said India could allow another 1 MMT of sugar exports if India's 2022/23 sugar output reaches the government target of 33.6 MMT. Â India has already allowed 6 MMT of sugar exports. Â
May NY sugar last Friday rallied to a contract high and is just below the 6-year nearest-futures (H23) sugar posted last Tuesday. Â Global supply concerns have sparked fund buying of sugar after the International Sugar Organization (ISO) on Feb 24 raised its 2021/22 global sugar deficit estimate to -2.25 MMT from a November estimate of -1.67 MMT and cut its 2022/23 global sugar surplus estimate to 4.15 MMT from 6.19 MMT. Â However, the ISO still projects that global 2022/23 sugar production would climb +4.8% y/y to a record high of 180.4 MMT. Â
A rally in crude oil (CLJ23) Monday to a 3-week high is bullish for sugar prices.  Strength in crude benefits ethanol prices and may prompt Brazil’s and India’s sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies.
The Indian Sugar Mills Association (ISMA) reported last Friday that India's 2022/23 sugar output from Oct-Feb 28 rose +1.8% y/y to 25.76 MMT. Â
Sugar prices have underlying support from concern about smaller sugar production in India.  The Indian Sugar Mills Association (ISMA) on Jan 31 cut its 2022/23 India sugar production estimate to 34 MMT from an Oct estimate of 36.5 MMT and cut its India 2022/23 sugar export estimate to 6.1 MMT from an Oct forecast of 9 MMT.  In addition, the  ISMA said that it sees India's sugar mills diverting 4.5-5.0 MMT of sugar to ethanol production in 2022/23.  India is the world's second-largest sugar producer.
Reduced sugar production in Europe is a supportive factor for sugar prices. 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.
Strong Brazil sugar output is bearish for prices after Unica reported Monday that Brazil's 2022/23 sugar production through mid-February rose +4.5% y/y to 33.503 MMT. Â Brazil is the world's largest sugar producer.
A bearish factor for sugar was the Feb 1 projection from the Thai Sugar Mills Corp that Thailand's 2022/23 sugar production would climb +14% y/y to 11.55 MMT. Â Likewise, Thailand's 2022/23 sugar exports are projected to increase +17% y/y to 9.05 MMT. Â Green Pool Commodity Specialists Monday said that Thailand's 2023 sugar production reached 6.59 MMT as of Feb 8, up nearly +10% from last season, with sugar content in the cane crop at a record high. Â Thailand is the world's second-largest sugar exporter. Â
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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. For more information please view the Barchart Disclosure Policy here.
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