In the past few weeks, we have spoken to several experts of international repute to get a sense of international sugar dynamics- outlook on sugar production in key sugar growing countries- Brazil, Thailand etc, international price trends and factors to watch out for.
In all the mixed voices, few things have emerged as near certainties.
Brazil is enjoying bumper sugarcane harvest prospects. On the back of a good cane in the concluding 2023-24 season, there is a growing expectation of another record production year in the 2024-25 season.
In the latest interview that ChiniMandi had with Dr. Claudiu Covrig, Founder and Senior Analyst, CovrigAnalytics, he extended a balanced view on Brazil, one view that is based on the ground reality of today, wherein dry weather is favouring a higher sugar production, in the same tone he warned about relying on Brazil solely for world sugar demand.
Covrig feels that the second half of the Brazilian crop might throw some surprises as the impact of dryness will be mainly seen at the tail of the crop. He also spoke about incidences of frost which can potentially damage the cane crop. In a nutshell, there are several key factors that could shape up in Brazil, mainly weather and port infrastructure, which could tip the balance.
In Thailand, the record heatwave is a worrying factor. Sugar trade expert Julian Price is not too optimistic about a good crop in Thailand, which he opines is looking bad owing to dry weather, a heat wave (again) and poor water reservoir levels. He foresees another year of likely tightness in global sugar S&D.
Similar sentiment is seen in the latest report by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS). It has estimated that sugar production in 2023-24 will decline to 8.8 MMT, down 20% from the previous season. However, the report is optimistic about Thailand’s cane crop for the next season. The sugar production is expected at 10.2 MMT, up 16% from the ongoing year’s sugar production on better sucrose yield.
India’s sugar production has fared better in the current season of 2023-24, compared to the initial estimates, amid better than expected sugar production in Maharashtra. For the next sugar season commencing from October 2024, it’s too early to predict the harvest size. A lot hinges on robust and well-distributed Southwest monsoon rains.
For further inquiries or to contact Uppal Shah, Editor-in-Chief, please send an email to Uppal@chinimandi.com.
