Sugar production in Brazil grows and drops prices in New York

Sugar production in Brazil grows and drops prices in New York | Quotes

The price of sugar fell significantly on the New York Stock Exchange with the indication that Brazil, the world’s largest exporter, will increase its supply of the product on the market. In this Thursday’s session (25/4), demerara lots for July fell 3.09%, to 19.16 cents per pound.

This Thursday, the National Supply Company (Conab) reported that Brazil will produce less sugar cane in 2024/25. In its first estimate for the new season, the state-owned company predicted a supply of 685.86 million tons, a drop of 3.8% compared to the previous harvest.

Despite the reduction in the sugarcane harvest, Conab estimates that sugar production will grow 1.3%, to 46.29 million tons. If confirmed, this volume will be a record.

“The market is not concerned about whether there will be a drop in the sugarcane harvest, which is expected to be 40 million tons smaller in the next harvest. The great attention is on sugar figures, which are traded on the stock exchange”, says Maurício Muruci, analyst at Safras & Mercado.

He also explains that the mills’ strategy should encourage greater sugar availability for the new cycle.

“The sugar that will be produced and exported was traded at prices from the previous season, which were at the highest levels in 15 years. Industries took advantage of this good moment to lock in sales until 2025,” he adds.

The analyst concludes by saying that the optimistic projections for the Brazilian harvest are combined with an unexpected increase in production in other major players, such as India, Thailand and China.

Coffee futures prices rose on the New York Stock Exchange. Lots for delivery in July closed up 0.97%, quoted at US$ 2.2810 per pound.

Market agents continue to monitor the restrictions on Robusta coffee, which have recently driven the appreciation of Arabica. The climate for Brazilian crops is another point of attention.

According to Eduardo Carvalhaes, an analyst specializing in the coffee market, a more significant change in the weather over producing areas in central-southern Brazil should occur in the first week of May, when a new cold front should advance along the coast of Brazil, spreading episodes of rain across Paraná, Southeast and even over areas of Bahia.

After rising more than 5% the day before, cocoa fell on the stock exchange. Contracts for July closed down 1.93%, to US$ 10,804 a ton.