Dreyfus projects small global sugar supply, sees Brazil crop uncertain

The global sugar market will have a small surplus in 2024/25 at 800,000 metric tons versus a surplus of 2.5 million tons in 2023/24, commodities trader Louis Dreyfus said on Tuesday, adding the outlook for Brazil was still uncertain.

Higher production in Thailand and Europe due to increased planting of cane and beet will be partly offset in 2024/25 (October-September) by falling output in India if the Indian government keeps its ethanol program as planned, said Dreyfus’ head of sugar Enrico Biancheri in a presentation during New York Sugar Week.

Dreyfus estimates Thailand will produce 1.6 million tons more in 2024/25 for a total 10.5 million tons, while Europe plus the United Kingdom will boost production by 800,000 tons to 17 million tons.

“There was an increase in planting in several parts of the world, which will add 2.5 million tons to global sugar production,” said Biancheri, adding that in some places such as Brazil sugar cane took area from grains or ranching, while in Thailand it expanded over former cassava fields.

He said most of the acreage gains happened when sugar prices were higher last year SBc1 and that the incentive to switch crops was smaller currently.

The executive said the Brazilian Center-South crop outlook is uncertain at the moment due to drier-than-normal weather. He projects the crop at a similar size as last year’s record around 42.5 million tons, but added that cane agricultural yields from May or June onward will give a better estimate.

Broker StoneX on Tuesday projected Brazil’s sugar output at 42.3 million tons.

Biancheri is positive on prices. He said the current level around 19.25 cents/lb is good given the fact funds are carrying a net short position of around 50,000 contracts.

He added the market is not pricing any potential problems with production or shipments from Brazil, which is expected to account for around 80% of global raw sugar exports in 2024/25.
Source: Reuters (Reporting by Marcelo Teixeira; Editing by Susan Fenton)