Global sugar market price likely to remain soft due to expectation of better production

06-Jun-2024 01:31 PM

New York. Sugar prices in the international market have fallen to the lowest level in the last one and a half years, while buyers are still confident of some more softening in it, so they are currently adopting a 'wait and see' policy.

There is pressure on sugar prices due to the possibility of better production, which may continue till the beginning of the next season.

The futures price of raw sugar for the July contract at the New York-based Inter Continental Exchange (ICE) has come down to 18.81 cents per pound (Rs 34,875 per tonne), which is the lowest level in the last 18 months.

The futures price of sugar has been hovering around this level since the middle of last month (May).

There are indications of a great production of sugar during the 2024-25 season in Brazil - the world's leading producer and exporter country - like the 2023-24 season.

There, the production of 410 lakh tonnes of sugar is being estimated this year, which is much higher than the normal average despite being slightly less than the historical record production of 424 lakh tonnes of 2023-24 season. Meanwhile, in Asian countries, sugar production in Thailand is estimated to increase by 16.4 percent to 120 lakh tonnes.

In India, good rains are expected after the outbreak and effect of the El Nino weather cycle ends, which may lead to some increase in the production of sugarcane and sugar. But still the production may remain far behind the peak level.

According to the All India Sugar Trade Association, buyers from major importing countries are currently showing less interest in buying sugar, due to which pressure is being seen on the market price.