SUGAR STOCKS When comes to sugar stocks, Brazil is already holding less than last year by 1,5 mln m/t as of August 24 and depending on what is going to be produced and based on a stronger demand this year (strong exports), Brazil could potentially run out of sugars by February 2025. Demand will need to shift, no question about that!
One may say the same about soybeans and depending on what the crop actually was i.e. 147 mln or 153 mln m/t, Brazil would run out of soybeans by November or December! Well, demand will need to shift and in the case of soybeans, the USA is waiting for it!
A less worrying situation is that Russia and Ukraine have also suffered with frost, heat and low rainfall in places. At this stage the two nations may produce 900k m/t less sugar in 24/25 than 23/24.
India had a good monsoon and the total cane area is up 1%, while cotton is down 12%! A good monsoon and higher area would lead to a larger cane crop, but many don’t see that. The less than normal monsoon in 23/24 and lower rainfall from September 2023 to May 2024 may have affected some cane areas. Current sugar production estimates range from 27sh to 31sh mln m/t, down 1 to 4 mln m/t vs. last year. Most see a small drop, but it’s early days.
A general view of a flooded farmland after heavy monsoon rains in western Maharashtra. Photo credit: Manoej Paateel / Shutterstock.
Indian sugar stocks are higher by 3 mln m/t, but the Indian Government is still not allowing exports, at least until they have a better understanding of what the sugar production may be. India is committed to their Ethanol program which could reach 10 billion litres soon and the main source will need to be cane one way or another i.e. molasses and cane juice. India used to be a large corn exporter, around 2,5 mln m/t, but in 2024 India is becoming a nett corn importer!
So, these are the producers that may experience lower sugar productions i.e. Brazil, Russia, Ukraine and perhaps India.
Central America and Colombia may produce a bit more sugars, but we are talking kilos rather than large sums.
Mexico remains a wild card as the area and age of the crop reduced their sugar production in 23/24 to the lowest in 24 years i.e. 4,7 mln m/t while their domestic needs is at 4.6 mln m/t. What Mexico doesn’t produce, Mexico doesn’t export and the USA is the main destination. Mexico became a nett importer in 2024, importing close to 600k m/t while exports may not reach 500k m/t. The USDA estimated Mexico bouncing back to 5 mln m/t (August 2024 report) but perhaps they may downgrade their optimism.
On the other hand, Thailand may produce around 2 mln m/t more due to
a good rainfall and increased area. Sugar stocks are similar to last year so, Thailand would become a stronger exporter only from Jan/Feb 2025 onwards.
Pakistan may have a good crop again and is asking for as much as 1 mln m/t export licences (got 200k so far) and the EU/UK may produce 800k to 1,2 mln m/t more, which will lead to higher exports and lower imports.
The EU may be carrying a bit more in stock and the larger crop is putting pressure on the domestic market which may not rise so easily from here (around 500sh Euros per m/t).
A MIXED BAG So, we have a mixed bag of lower sugar productions and lower exports, some better crops and a bit more exports. Some are carrying higher stocks, but not being allowed to export it.
The World Sugar Trade dropped by 2,139k m/t in 2023 due to higher prices. Stocks were consumed and some consumption was affected. In 2024, due to low stocks and lower prices plus the fact that economics and population are still leading to higher sugar consumption, the world trade may rise by 2 to 3 mln m/t. The amount of sugars that left one country to another, already rose by 1,6 mln m/t during the first 6 months of 2024.
10 | ADMISI - The Ghost In The Machine | Q3 Edition 2024
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