Sugar prices declined marginally after the Indian Association of Sugar and Bioenergy Manufacturers (ISM) said India will have 2 million tonnes of sugar to export next season and urged the government to lift the existing ban on sugar exports. Went.
While October raw sugar futures on ICE had previously hit a seven-month high of 23.71 cents a pound, they closed 0.5% lower at 23.31 cents a pound. The December sugar contract in London closed at US$580.70, down US$3.20, 0.54%.
Sugar prices also declined on Thursday after WTI crude fell more than 3% to a two-week low. Weakness in crude oil reduces ethanol prices and this may cause the world’s sugar mills to divert more sugarcane crushing towards sugar production instead of ethanol, thereby increasing sugar supply.
Drought conditions in Brazil have reduced the country’s sugar production prospects and put sugar prices under severe pressure over the past two weeks. Last Friday, Rabobank cut its Brazilian sugar production forecast for 2024/25 to 39.3 million tonnes from a previous forecast of 40.3 million tonnes, citing extreme drought.
Analysts at the London Stock Exchange Group (LSEG) told Reuters that, although some meteorological models predict rains will eventually come to Brazil, they will likely only materialize in mid- or late October, if at all. “Overall, Brazil’s forecast for October looks broadly negative, with signs of relief towards the end of the month,” he said.
With information from Barchart and Reuters
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