THE global sugar market is will flip into a deficit of nearly two million tonnes this season as the upcoming crop in top grower Brazil has started on a poor trajectory amid unfavourable rainfall patterns, according to Sucres et Denrées (Sucden).
The trader said in a report this week that raw sugar availability from Brazil’s key Centre South region is expected to be almost 40 per cent lower in the fourth and first quarters, versus a year ago.
It noted that in the northern hemisphere, cane and beet production has responded positively to high sugar prices in 2023, declining grain prices and generally favourable weather, but said this would not be enough to offset Brazil.
Brazil’s cane has been damaged by both drought and fire and so rainfall in the coming months will be crucial to determining its potential, Sucden said, adding the chance of No 2 sugar producer India coming to the market’s rescue and resuming exports remains limited.
Exchange traded raw sugar futures, used to price physical sugar contracts around the world, hit six month highs last month amid concerns over the prolonged, record drought in Brazil. REUTERS
