Sugar Halts Rally on Better-Than-Expected Brazil Crop Data

Raw sugar futures retreated in New York as producers in the world’s top exporter Brazil reported better-than-expected results for the ongoing crop.

The most-active futures contract fell as much as 2.5%, halting a winning streak of five straight days.

Data from Brazil’s sugar cane group Unica showed positive signs for the health of crops in the country, easing recent concerns over excessive dryness and heat in the top producing Center-South region.

The amount of sugar per ton of cane, an indication of the quality of the raw material, improved in the first half of August compared with the prior year, Unica said in a Wednesday (Aug 28) report. The index, known as TRS, totaled 151.09 kilograms per ton, and was nearly 1% higher than expected by analysts in an S&P Global Commodity Insights survey.

The chart below shows the sugar export volume at the Port of Santos, Brazil’s top sugar export port, between January 2021 and June 2024. The information was derived from DataLiner.

Sugar Export Volume from Santos | Jan 2021 – Jun 2024 | WTMT

Source: DataLiner (click here to request a demo)

The numbers still don’t reflect the negative impacts of recent fires that affected cane crops, Unica intelligence director Luciano Rodrigues said in the report. Widespread fires reported in the largest producing state of Sao Paulo last weekend have already driven mills in Brazil to lower estimates for sugar production.

The fires and the dry weather can affect the mills’ capacity of transforming cane into sugar, as a lower quality of the raw material may force the companies to divert more cane to making ethanol. An August decline in the percentage of sugar cane juice used for sweetener is unusual for this time of year, StoneX said in a Wednesday note.

Source: Bloomberg

Sharing is caring!