Analysis Sugar

Sugar prices drop to lowest point in months

May 15, 2024 - Alex Jurvillier

The global sugar prices on the futures markets are being pushed down by positively adjusted production expectations from various parties. This brings the sugar prices to their lowest point in over a year. Looking at the situation in the Netherlands, last week, 22% of the planned sugar beet area still needed to be planted. In some parts of the Netherlands, it was even 80%.

Since the end of last week, sugar prices have been on a downward trend, which continues at the beginning of this week. Analysts mention various influences, including the expectation from market agency Datagro, which positively revised the Brazilian sugar production expectation of the central and southern regions, putting pressure on the price. The production expectation for the current season was increased from 40.45 million tons to 41.6 million tons. This has reduced concerns about a global sugar shortage.

At the beginning of this week, the futures market quotations fell to $410.72 per ton for New York and $550 per ton for London. For New York, this is the lowest point since January 2023, and for London, the lowest point since February 2023. However, sugar prices rose again yesterday. Analysts suggest that this could be due to the decline in the value of the US dollar, while the Brazilian Real increased in value.

Dampness affects the Netherlands
Looking at the situation in our own country, the recent dampness has not been favorable for the Dutch sugar beet area. It has made planting more difficult. Last week, Cosun wrote that there was still 22% to go. Walcheren was then at only 20% and still has to plant the majority. This percentage is likely significantly higher now, given the fine weather conditions in recent days.

We are still waiting to see the consequences of the delayed planting and the sugar volume produced at the end of the season. An insider reports that planting, like last year, started later than average, but there is a possibility of planting more this year.

Alex Jurvillier

Alex Jurvillier is a market specialist in sugar and cacao at DCA Market Intelligence. He also monitors the milk supply in the most important dairy countries and keeps an eye on developments in food.

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