World sugar stocks may decline in early 2025, but for now quotes are falling

Global sugar supplies will fall to a six-year low in early 2025, trader Czarnikow Group Ltd. predicts, as drought cuts production in Brazil, a major sugar exporter.

 

The extreme drought has worsened the condition of the sugar cane crops, which will delay the start of harvest next year and reduce the volume of cane processing in the last months of the current season.

 

Against the background of a possible reduction in production in Brazil, in particular due to the spread of plant diseases, sugar prices in recent years have exceeded the average historical level, which indicates the dependence of the world market on supplies from this country.

 

According to the estimates of consulting company Datagro, this year almost 75% of all raw sugar sold in the world will be produced in Brazil.

 

Sugarcane harvesting in Brazil will begin in the second half of April, which is several weeks later than usual. The premium that traders pay for March deliveries compared to May has grown already in September, which indicates a future shortage.

 

At the same time, experts remind that the reduction in production in Brazil will be partially offset by the reduction in demand and the increase in China's own harvest.

 

Increased rainfall in Brazil in recent weeks has dampened speculative demand for soybeans and sugar on global markets, sending prices down.

 

On the exchange in London, December futures for white sugar No. 5 for the month fell by 3.9% to $563/t (which is 7.6% higher than prices on September 1 - before the start of speculative growth), and March futures for cane sugar No. 11 – by 3.9% to $21.73/lb or $478/t (+11.4% compared to September 1).