Sugar prices got a boost crossed 18.65 level after Brazil has been witnessing another round of frost last week in sugarcane producing areas.
October raw sugar rose 0.5% to $18.50 per lb, having hit its highest since late February at $18.65.
This season’s crop is already under pressure after drought conditions this year.
Prior to the latest round of frost, CONAB was estimating that total Brazilian sugar production will fall 5.7% YoY to 38.9mt in 2021/22.
In June, the International Sugar Organization (ISO) expected the global sugar deficit in the 2021/2022 season to reach 2.7 million tonnes. Now ISO forecast has been revised towards an increase in the global deficit.
The Singapore agro-industrial group Wilmar International has cut the forecast for the sugar cane crop in Brazil in the season 2021/2022 to a minimum in more than 10 years - 510 million tons from 530 million tons.
According to Wilmar International, the harvest may be even smaller next season. Meteorological agencies Rural Clima and Somar Meteorlogia note that the Brazilian state of Minas Gerais is now experiencing the coldest weather in 27 years. This has already caused a powerful rise in coffee quotes.
Brazil temperatures are now moderating. Mills were also processing for more Ethanol and less for Sugar than expected and this trend should continue even with weaker world petroleum prices.
London has been the weaker market on ample supplies of White Sugar available to the market and as demand for White Sugar is less. There is plenty of White Sugar available in India for the market and monsoon rains are promoting good conditions for the next crop.
Ethanol demand is returning to the market as more world economies open up after the pandemic.
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