11. Februar 2025
World sugar market development
The stage was set for a winter with a tight supply situation in the global sugar market, but an unexpectedly strong tail end of the Brazilian crop coupled with a sudden decision by Chinese authorities to restrict imports of liquid sugar and premixes from Thailand with immediate effect solved the trade flow deficit. Prices reacted instantly to the news and the world market price for raw sugar closed the year at USc19.26/lbs, down 8.6 in December. Another political decision, this time an Indian export allowance of 1 mln mt, added to the bearish sentiment in January and prices fell as low as USc17.57/lbs before recovering towards the end of the month to close January at USc19.35.
In Brazil, the harvest is virtually over with a cumulative 614.0 mln mt of cane crushed (-4.9% year-on-year) and 39.8 mln mt of sugar produced (-5.5% year-on-year). Keeping in mind the following crop is not expected to start early, total sugar production for the official Apr/Mar season should not surpass the 40 mln mt mark. Regarding the coming campaign, rainfall during the month of January in the main cane growing regions in São Paulo was disappointing with levels reaching only 52% of their normal levels for January. February rainfall will be critical for the development of the growing cane in the fields, with some potential reductions in production forecasts in case the rainfall does not improve rapidly. Cumulative rainfall over the last 6 months has now dropped to 93% of normal levels.
The Indian government approved a 1 mln mt export allowance in January. A questionable timing, as Indian sugar production at the same time was revised lower due to disappointing yields. The export quota has been allocated amongst Indian millers to be exported during the current campaign. For those not willing to export, they will have until March 31 to either surrender or exchange their export quota with a domestic sales quota from another miller. They will have until the end of September to export the sugar, while supplying refiners in the Special Economic Zone will be considered as export. This will favour millers located closer to the zone to exchange quotas with others located further away. Meanwhile, sugar production reached 16.5 mln mt by January 31, a 12% decline from last season. The Indian Sugar and Bioenergy Producers Association (ISMA) in its 2nd advanced estimate for the 2024/25 season lowered its gross sugar production by 2 mln mt to 31.1 mln mt. The net sugar production estimate after use of 3.8 mln mt sucrose for ethanol is 27.3 mln mt (-15% year-on-year). Other Indian industry bodies project even lower production; National Federation of Cooperative Sugar Factories Limited (NFCSF) expects 27.0 mln mt and All-India Sugar Trade Association (AISTA) 26.5 mln mt.
In Thailand, the sugar production is making good progress and has reached 4.9 mln mt by January 28, showing an increase of 464kt year-on-year. The high crushing pace, favored by an absence of rain in the cane areas, is however accompanied by lower-than-expected yields, leading analysts to reduce their production figures for this campaign below 11 mln mt. Another feature of this campaign is the lower portion of white sugar production, as a response to the recent ban of China imports for liquid sugar and premixes. Raw sugar production has reached 3.9 mln mt so far out of the 4.9 mln mt total production, or 500kt higher when compared to last year.
The increase in production seen in Brazil has been countered by lowered production estimates in other countries such as Thailand, India, Australia, Russia and the EU. Hence, many market analysts now see a global production deficit of about 1.5 – 2.5 mln mt in the current Oct/Sep sugar marketing year.