Crude Sugar Prices Hit Two-Year Low: Global Trends and Factors

Crude sugar prices fell to their lowest level since October 2022 due to a sell-off in global markets and increased supply from Brazil and India. According to Bloomberg, prices fell by 2.5% to 17.64 cents per pound (0.37 hryvnias per 0.45 kg).

Brazil, the world's largest sugar producer, played a key role in this decline. From the beginning of the year to July, the country exported about 20 million tons of sugar, which is 40% more than the volume of sugar exported during the same period last year. Such a significant supply to the world markets caused an oversupply, which contributed to lower prices.

India, the second largest producer of sugar, has also affected the global market. Favorable weather conditions in India have a positive effect on sugarcane production. This, in turn, leads to an increase in global sugar reserves, which also contributes to a drop in prices.

Analysts note that this situation may change. Claudio Kovrig notes that the pace of exports from Brazil could slow down from November to December or even earlier if the rainy season starts on time in October. This may affect the level of supply and, accordingly, prices in world markets.

The decline in unrefined sugar prices is also linked to global economic trends, including changes in supply and demand in commodity markets. The situation on the sugar market continues to be dynamic, and prices may change depending on the development of weather conditions and the economic situation in the leading producing countries.

In general, the decline in raw sugar prices is the result of a combination of factors such as increased supply and changes in weather conditions. This could have a significant impact on the sugar market in the short to medium term.