May NY world sugar #11 (SBK24) on Thursday closed down -0.52 (-2.60%), and Aug London ICE white sugar #5 (SWQ24) closed down -13.00 (-2.25%).

Sugar prices retreated Thursday based on the outlook for larger sugar output in Brazil.  Conab, Brazil's crop agency, projected Thursday that Brazil's 2024/25 sugar production will climb +1.3% y/y to a record 46.292 MMT as 2024/25 sugar acreage in Brazil increases by +4.1% to 8.7 million hectares (21.5 million acres), the most in seven years.  For the 2023/24 marketing year, however, Conab last Thursday cut its Brazil sugar production estimate by -2.6% to 45.7 MMT from a November estimate of 46.9 MMT.

Last Wednesday, NY sugar fell to a 15-month low, and London sugar dropped to a 14-month low on improved supply prospects.  Last Friday, Unica reported that Brazil's Center-South sugar output in the second half of March was 183,000 MT, up +9% from last year.  Also, Brazilian sugar output so far in the 2023-24 marketing year through March is up +25.7% y/y at 42.425 MMT.  Brazil's sugar mills have ramped up their cane crushing for more sugar and less ethanol.  Mills have crushed 48.87% of total cane for sugar production this year, up from 45.86% last year.

On the bullish side, the Indian Sugar and Bioenergy Manufacturers Association reported last Tuesday that India's 2023/24 sugar production from Oct-Apr 15 fell -0.5% y/y to 31.09 MMT as more sugar mills closed for the year and ended their crush of sugarcane.  As of Apr 15, 84 Indian sugar mills were still open to produce sugar, compared with 132 mills open at the same time last year.

In October, India extended restrictions on sugar exports from Oct 31 until further notice in an attempt to maintain adequate domestic supplies.  India allowed mills to export only 6.1 MMT of sugar during the 2022/23 season to Sep 30 after allowing exports of a record 11.1 MMT in the previous season.  India is the second-largest sugar producer in the world.  

In a bearish factor for sugar prices, India's Meteorological Department expects the 2024 (Jun-Sep) monsoon period to be 106% of a long-term average of 87 centimeters, which could boost India's sugar output.  By contrast, the 2023 (Jun-Sep) monsoon rain was 6% below average, the poorest monsoon rainfall in 5 years.  

Reduced Thai sugar production is bullish for sugar prices.  Rainfall in Thailand has been below the same period last year, and the current El Nino weather system could continue to depress rainfall in Thailand.  Sugar millers in Thailand are reporting the lowest yield from crushed cane this year in at least 13 years.  Thailand is the world's third-largest sugar producer and the second-largest sugar exporter.  However, Thailand's government on April 22 estimated that Thailand's 2023/24 sugar production from Dec-Apr 17 was 8.77 MMT, above a Feb estimate from the Thai Sugar Millers Corp for sugar production of 7.5 MMT.

NOAA predicts the recent El Nino weather event will end this month, and the tropical Pacific will transition to neutral conditions, which should benefit weather patterns in South America and Asia and boost global sugar crops.  

The USDA, in its bi-annual report released on Nov 23, projected that global 2023/24 sugar production would climb +4.7% y/y to a record 183.461 MMT and that global 2023/24 human sugar consumption would increase +1.2% y/y to a record 178.431 MMT.  The USDA also forecasted that 2023/24 global sugar ending stocks would fall -13.3% y/y to a 13-year low of 33.681 MMT.  The International Sugar Organization (ISO) on Feb 28 raised its 2023/24 global sugar deficit estimate to -689,000 MT from a November estimate of -335,000 MT.
 

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