Sugar Prices Decline Amid Brazilian Real Weakness and Production Forecasts
Sugar prices have decreased for a third straight day due to a declining Brazilian real and reduced production forecasts. The USDA and ISO have heightened their deficit predictions for the global sugar market. India’s production decline and drought conditions in Brazil provide some support, yet an expected increase in Thai production may adversely impact sugar prices.
On Friday, May NY world sugar 11 (SBK25) closed down by 0.37 cents, or 1.96%, while May London ICE white sugar 5 (SWK25) fell by 7.10 dollars, equating to a decrease of 1.32%. Sugar prices have faced a decline for three consecutive days, hitting a two-week low due to the weakening of the Brazilian real. The USDA has forecasted a substantial global sugar deficit for 2024/25, increasing it from 2.51 million metric tons (MMT) to 4.88 MMT. Additionally, the International Sugar Organization (ISO) revised its sugar production estimate downward from 179.1 MMT to 175.5 MMT for the 2024/25 period.
In summary, a combination of factors including the weak Brazilian real, reduced sugar production forecasts, and changes in export regulations are impacting sugar prices significantly. While some support exists from India’s decreased production and adverse weather conditions in Brazil, the anticipated surplus from Thailand poses a bearish threat to prices. The outlook suggests continuing volatility in the global sugar market as these elements evolve.
Original Source: www.tradingview.com
