The sugar prices on the ICE exchanges of London and New York were searching for direction last week, but tend slightly more upwards. Brazil produced less sugar in the past period. News closer to home is all about much more sugar. This puts pressure on the profit expectations of the German sugar giant Südzucker.
The sugar price in New York closed yesterday at $422.85 per ton and in London at $523 per ton. Compared to exactly a week ago, the prices have been somewhat lifted.
Estimating how much sugarcane is still to come in Brazil, the world's largest producer, proves to be very complex. The amount of sugarcane left, looking back at past harvests, has varied greatly according to analysts. What we do know is that from the start of the season until the end of August, 422.6 million tons of sugarcane have been processed in the main region of Brazil. That is 3.9% more than in the same period last year.
On the other hand, 3.3% less sugarcane was processed in the second half of August. This means that the figures for the fourth biweekly period are below last year's level, as reported by the Brazilian sugar association Unica. The massive fires on the sugarcane plantations at the end of August contribute to this. Sugar production in the second half of August was 3.25 million tons. That is 6% lower than last year in the same period. However, the total sugar production since the beginning of the season is 3.9% higher (27.17 million tons in total). This is mainly due to the relatively good start of the Brazilian season.
Südzucker expects more sugar and less profit
News closer to home is about Südzucker. Yesterday (September 16), the sugar giant announced that it expects lower figures for the rest of the year. An improved harvest outlook within Europe would increase the amount of sugar on the European market. The net profit expectation was revised downwards to between €172 and €275 million, compared to the previous expectation of €500 to €600 million. What also influences Südzucker's expectations is the tension in the Middle East and uncertainties resulting from the war in Ukraine.