Analysis Sugar
Relatively stable sugar price with mild correction
The sugar prices remained relatively stable last week. In recent days, prices corrected slightly upwards, but the overall trend is downward. A weaker Brazilian real plays a role in this.
The sugar prices have remained relatively stable in recent days, although there was an increase. Both the New York and London markets saw prices rise for three consecutive days. Yesterday, the July 2024 contract in New York closed at $415.79 per ton, an increase of 3.7% compared to May 30. The August 2024 contract for London closed at $555.80, a 2.9% increase in the same three trading days. In Europe, the sugar price is at its highest point in almost a month, and in America since mid-May.
The sugar price is still much lower than it was a few months ago. In recent days, this was partly due to a weak Brazilian real. Currently, 1 Brazilian real is worth $0.189. On January 2, this was still $0.206. This could lead more Brazilian processors to choose to produce sugar for the export market.
Technically, there is now an upward correction in a downward trend. This is also reflected in the sugar price index of the Food and Agriculture Organization. In January, the sugar index was at 136.4 points, which dropped to 127.5 points in April. The new FAO sugar index will be published this Friday, and it is expected to have decreased again.
High import tariffs on beet pulp pellets from Russia
The Council of the European Union announced on May 30 that a new regulation has been adopted to impose high tariffs on imports from Russia and Belarus. Import duties for grains, oilseeds, and derived products from both countries will be increased to a level that is expected to practically halt imports. The increased import duties also apply to beet pulp pellets, a derivative product of sugar beets. The regulation aims to prevent Russian export revenues from being used to finance the Russian war of aggression against Ukraine.
European sugar production
The European sugar production for the upcoming season was estimated at 15 million tons in the May report of the U.S. Department of Agriculture USDA, the same as last season. Consumption, import, and export are likely to remain at the same level.
