New York: The global sugar market could see a lower surplus than expected in the 2024-25 season, from October to September, despite the rise in sugar output in Asia. This would be a result of the steep reduction in the Brazilian sugar crop, according to a StoneX broker.
On Wednesday, StoneX revised its forecast for Brazil’s Centre-South sugar output, reducing it by nearly 2 million metric tonnes to 40.5 million tonnes. This adjustment is attributed to lower-quality sugarcane this year and a smaller-than-anticipated allocation of cane to sugar production.
The broker noted that Brazilian mills are maintaining a relatively high level of ethanol production to meet increased domestic demand. As a result, they are not diverting as much cane to sugar production as initially expected at the start of the harvest in March.
It cut the total cane allocation to sugar, or sugar mix, to 50.5% from the 52% seen in May.
Other top producers, like China, would have a boost of 500,000 tonnes to 11 million tonnes, while Russia’s production would be cut by 200,000 tons to 6.8 million tons. The projection for India remained at 28.8 million tonnes.
On that basis, StoneX now pegs the global sugar surplus at 1.21 million metric tons for 2024-25, down from the 2.51 million tons forecast in May.
