Market Analytics and Technical Considerations

Key Points

On Monday, March London white sugar #5 (SWH23) closed -1.10 (-0.21%), while March NY global sugar #11 (SBH23) closed for the night +0.05 (+0.26%).

On Monday, sugar prices recovered from early declines and reached a mixed conclusion, with London sugar recording a 2-week low. As a result of small on Monday, NY sugar rebounded from a two-week bottom and finished marginally higher. Higher crude prices increase the price of ethanol and may cause Brazil’s processing plants to divert more cane processing from producing sugar to ethanol, reducing the amount of sugar available.

Price of sugar After Unica announced on Friday that Brazil’s Center-South sugar output increased by 0.3% year over year through mid-November of the 2022–23 market year to 31.966 MMT, the market on Monday began lower than it had on Friday.

Last Monday’s prediction from Czarnikow that Brazil’s Center-South mills will output 34.7 million metric tons of sugar in 2023–24 (Apr/Mar), up +7% y/y and the largest in 3 years, was a bearish signal for sugar.

The Organization of Cane Producers Association in Brazil predicted last Monday that due to excellent weather, Brazil’s sugar output will reach 36.9 million metric tons in 2022–2023 and 37.2 million metric tons in 2023–2024. This has put pressure on sugar prices.

India’s increased sugar production is negative for pricing. On October 24, the Indian Sugar Mills Association predicted that as Indian farmers increased their cultivated cane area by +5.4% y/y to 5.6 million hectares, India’s 2022/23 sugar production (from October 1 to September 30) will rise +2% y/y to 36.5 MMT. India produced 35.8 MMT more sugar in 2021/22, a +2.9% year-over-year increase. India ranks as the second-largest producer of sugar in the world.

Strong sugar exports from India, which increased +57% y/y to a record 11 MMT in 2021/22, are also negative for prices. Nonetheless, the Indian Sugar Mills Association recently reported that from October 1 to November 15, India’s sugar production declined by -4.3% y/y.

The International Sugar Organization (ISO) predicted on Tuesday that worldwide sugar cane would increase +5.5% y/y to a new high of 182.1 MMT, which is a dismal development. Additionally, ISO predicted that there will be a +6.2 MMT excess in the world sugar market in 2022–2023.

Technical Indicators – Exponential Moving Averages (Daily)