Sugar Prices Surge Amid US-Mexico Import Concerns

Sugar prices are slightly up due to US sugar producers advocating for a decrease in sugar imports from Mexico.

The American Sugar Coalition is urging the government to reduce Mexico’s sugar exports to the US by 44%, potentially raising prices and prompting the US to seek sugar from other countries amid already constrained global supplies.Meanwhile, decreased sugar production in India is driving prices upward.

The Indian Sugar Mills Association (ISMA) revealed last Monday that India’s sugar output for the period of October through March 15 of the 2023/24 season dropped by 0.7% compared to the previous year, reaching 28.1 million metric tons (MMT).

The 2023 monsoon season (June-September) experienced a 6% deficit in rainfall, the lowest in five years. In response, India extended restrictions on sugar exports until further notice starting from October 31 to ensure ample domestic supply.

India permitted mills to export only 6.1 MMT of sugar during the 2022/23 season until September 30, following a record export of 11.1 MMT in the previous season. India ranks as the world’s second-largest sugar producer.

The Indian Sugar and Bioenergy Manufacturers Association increased its forecast for India’s sugarcane production in the 2023-24 marketing year by 2.9% to 34 million metric tons on March 13, up from January’s projection of 33.05 million metric tons.

This uptick in sugarcane output could lead to higher refined sugar production, depending on the amount converted into ethanol.Meanwhile, heightened sugar production in Brazil is exerting bearish pressure on sugar prices.

According to Unica’s report on March 12, sugar output in Brazil’s Center-South region during the second half of February reached 16,000 metric tons, compared to zero in the same period last year.
Additionally, Brazilian sugar production in the 2023-24 marketing year has surged by 26% year-on-year to 42.181 million metric tons. Unica anticipates that 28 mills in the Center-South region will resume production in the first half of March following their off-season pause, exceeding the 10 mills that reopened during the same period last year.

In its bi-annual report released on November 23, the USDA projected that global sugar production for the 2023/24 period would increase by 4.7% year-on-year, reaching a record high of 183.461 million metric tons (MMT).

Additionally, the report forecasted a 1.2% year-on-year rise in global human sugar consumption to a record level of 178.431 MMT. The USDA also anticipated a significant decrease of 13.3% year-on-year in global sugar ending stocks for the 2023/24 period, reaching a 13-year low of 33.681 MMT.

Furthermore, on February 28, the International Sugar Organization (ISO) revised its estimate for the 2023/24 global sugar deficit, raising it to -689,000 metric tons from the previous estimate of -335,000 metric tons reported in November.

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