India and Thailand’s Production to Offset Declines in Brazil
The United States Department of Agriculture (USDA) has projected that global sugar production will reach 186 million tons in the 2024/25 season. This represents a 1.38% increase from the estimated 183.5 million tons in 2023/24. According to the USDA’s Foreign Agricultural Service (FAS), anticipated production increases in India and Thailand will more than compensate for declines in Brazil.
Brazil’s Sugar Production Decline
For the 2024/25 season, the USDA expects Brazil’s sugar production to be 44 million tons, which is 1.54 million tons less than the previous year. Despite this decline, it will still be the second-highest production on record for Brazil. The reduction is attributed to decreased volumes of sugarcane ready for crushing due to dry weather conditions.
Significant Increases in India and Thailand
- Thailand: Sugar production in Thailand is forecasted to rise by 16.4% to 10.2 million tons in 2024/25. This increase is driven by a recovery in cane production and higher overall recoverable sugar levels (ATR).
- India: In India, sugar production is expected to increase by 500,000 tons to 34.5 million tons, attributed to improved agricultural yields.
Global Sugar Export Forecast
Global sugar exports are projected to decrease by 3.53% to 65.83 million tons in the 2024/25 season. The USDA reports that shipments from Brazil and Thailand are expected to fall by 4.1% and 10%, respectively, to 34.5 million tons and 9 million tons. Indian exports are forecasted to decline by nearly 20% to 3.7 million tons, as the government continues to restrict shipments to meet domestic demand.
Global Sugar Consumption and Stock Projections
- Consumption: The USDA estimates global sugar consumption will rise to 178.8 million tons in 2024/25, up from 177.33 million tons in 2023/24.
- Stocks: World sugar stocks are expected to decrease by 4.67% to 38.34 million tons by the end of 2024/25. In India, stocks are projected to increase by 17.7% to 12.35 million tons. Conversely, Thailand’s stocks are expected to drop by 45.3% to 2.92 million tons.
Factors Influencing Sugar Prices
Several factors could determine whether sugar prices will rise, remain stable, or fall in the upcoming season:
Weather Conditions: Favorable or adverse weather patterns in major sugar-producing regions such as Brazil, India, and Thailand will significantly impact crop yields and global supply.
Government Policies: Export restrictions and other government policies in key countries like India will influence the availability of sugar on the global market.
Production Levels: Increases in sugar production in India and Thailand may help offset declines in Brazil, affecting global supply dynamics.
Global Demand: Changes in global sugar consumption, driven by economic conditions and shifts in consumer preferences, will play a crucial role in market pricing.
Trade Dynamics:Fluctuations in global trade, including potential new trade agreements or disruptions, can impact export volumes and market prices.
Monitoring these factors will be essential for understanding future trends in sugar prices and market conditions.