July NY world sugar #11 (SBN22) on Tuesday closed up +0.06 (+0.32%), and Aug London white sugar #5 (SWQ22) closed down -5.80 (-1.03%).
Sugar prices Tuesday settled mixed, with NY sugar climbing to a 1-week high. Strength in crude oil prices underpinned sugar prices. Crude oil prices (CLN22) rallied more than +1% Tuesday, which benefits ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies.
Sugar prices gave up most of their gains Tuesday, and London sugar fell into negative territory, after the CEO of Copersucar said Brazil's sugar mills may crush as much as 548 MMT of sugar this year, up +4.8% from last year. Copersucar owns the world's biggest sugar trader, Alvean.
Sugar also has support from last Friday's report from Reuters that said India might cap sugar exports at 6-7 MMT starting in October.
Another positive for sugar was last Thursday's projection from Czarnikow for the global 2022/23 sugar market to fall into a -1.4 MMT deficit versus the +400,000 MT surplus it projected in May, as low rainfall in Brazil reduced sugarcane yields.
Ramped-up sugar output in India is bearish for sugar prices after the Indian Sugar Mills Association (ISMA) reported that India's 2021/22 sugar production during Oct 1-May 15 rose +14.4% y/y to 34.88 MMT.
The outlook for larger sugar crop sizes in India and Thailand is bearish for sugar prices. On April 15, the ISMA raised India's 2021/22 sugar production estimate to 35 MMT from 33.3 MMT, up +12.2% y/y, and said sugar exports would jump to a record 9 MMT. India is the world's second-largest sugar producer. Meanwhile, Thailand's Office of the Cane & Sugar Board estimated that Thailand would export 7 MMT of sugar this (2021/22) marketing year. Thailand is the world's second-largest sugar exporter.
A bearish factor for sugar was the projection from Conab on April 27 for Brazil 2022/23 sugar production to increase by +15% y/y to 40.3 MMT as the crop recovers from the past season's adverse weather. Also, the USDA's FAS on April 22 projected Brazil's 2022/23 sugar production would climb +2.9% y/y to 36.37 MMT and that 2022/23 Brazil sugar exports would increase by +3.7% y/y to 26.6 MMT.
In a positive factor for sugar prices, Unica on May 25 reported that Brazil 2022/23 Center-South sugar production through May 15 fell -39.8% y/y to 2.737 MMT.
More Sugar News from Barchart
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