Analysis Sugar
Brazilian sugar production disappoints
Sugar association Unica has published new data on Brazilian sugar production, providing important insights into global sugar production. The sugar quotations are seeking direction, and in India they are hoping for sugarcane plantations to receive more rain during the monsoon.
The sugar quotation in New York is currently at $418.44 per ton and that of London at $548.50 per ton. Both sugar quotations have slightly increased in the past five days.
The price of crude oil has continued to rise in recent days. On Monday, the Brent quotation for crude oil was at $84.25 per barrel. After hitting a low point on June 4, oil has almost fully recovered its value. It is important to keep an eye on this, as Brazilian sugar processors may choose to process more sugarcane into ethanol at higher oil prices. This could put pressure on Brazilian sugar production.
Brazilian sugarcane milling lags behind in May
Sugarcane milling in the central-southern region of Brazil, an important production region of the country, was 3.4% lower in the second half of May compared to last year. This is based on the latest data published by the Brazilian sugar association Unica. The sugarcane milling in that period amounted to 45.2 million tons. However, the milling since the beginning of the harvest season that started on April 1 is higher than last year. During that period, 140.7 million tons of sugarcane were milled, an increase of 11.2%.
In the end, the central-southern region produced 2.7 million tons of sugar in the second half of May, 7.7% less than the previous year. Since the start of the new harvest season, sugar production has increased by 11.8%. A total of 7.8 million tons of sugar has been produced since the season started. The Brazilian season has had a relatively strong start, which has contributed to the currently relatively low sugar prices.
India hopes for monsoon rain
In India - the third largest producer in the world - the monsoon rains are below average. News agency Reuters reported yesterday that rainfall since June 1 is 20% lower than normal according to the Indian Meteorological Department, covering almost all Indian regions. Indian sugar production largely depends on rainfall. A weather expert told Reuters that if the monsoon arrives, the rainfall deficit can be quickly resolved. Earlier, the US Department of Agriculture USDA expected an increase in Indian sugar production for the upcoming season (2024/25) by 500,000 to 34.5 million tons.
