Sugar prices gave up early gains and posted moderate losses on Wednesday after the Indian Sugar and Bioenergy Manufacturers Association estimated India’s sugar stocks for 2023/24 at 9.1 million tonnes and a surplus of 3.6 million tonnes and urged the government to reconsider allowing export of surplus sugar.
Raw sugar for October changed negative 0.08 cents, or 0.4%, to US$20.53 a pound, a day after hitting a two-and-a-half-month peak. White sugar contract for August fell 1.5% to US$575.50 a tonne.
India has extended the ban on sugar exports from October 31 until further notice to maintain adequate domestic supplies. After allowing exports of a record 11.1 million tonnes last season, India has allowed mills to export only 6.1 million tonnes of sugar during the 2022/23 season till September 30. India is the world’s second-largest sugar producer.
On Tuesday, sugar in New York rose to a two-and-a-half-month high as below-normal rains in Brazil raised concerns that dry weather would reduce cane yields and reduce sugar output from Brazil. London sugar fell on Tuesday after the European Commission’s agriculture and rural development department forecast that EU sugar output would rise 5% y/y to 16.4 million tonnes in 2024/25.
Sugar prices have also seen transitional support since last Friday, when India’s agriculture agency reported that a fungal disease called red rot was spreading in the Indian state of Uttar Pradesh, a major sugar producing region. Below normal monsoon rains in India may reduce sugar production and push up prices, as the India Meteorological Department reported on Monday that India received 147.2 mm of rainfall in the current sugar season till June 30, a decline of -11% from the long-term average of 165.3 mm.
The Brazilian real’s weakness is negative for sugar prices, as the real fell to a 2 1/2-year low against the dollar on Tuesday. A weak real encourages export sales by Brazilian sugar producers.
With information from Barchart
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