For the Quarter Ending September 2024
North America
The North American sugar market experienced a downturn throughout the third quarter of 2024, predominantly driven by sluggish demand for sugar. Insights from various market participants indicate that consumers in North America are increasingly prioritizing health and wellness, resulting in a strong focus on reducing sugar intake. In August World Agricultural Supply and Demand Estimates (WASDE) indicated that the U.S. sugar supply for the 2023/24 period was revised upward by 20,000 short tons, raw value (STRV), bringing the total to 14.702 million STRV. This increase is attributed to larger imports and an uptick in Florida cane sugar production, which offset lower production levels of beet sugar. However, a slight shortage was observed in September 2024, highlighting ongoing challenges within the market.
Poor sugarcane yields in key exporting countries, such as Brazil and Mexico, due to adverse weather conditions, are expected to reduce export volumes, thereby limiting sugar availability in North America. As a result, this supply constraint may lead to a price surge in the upcoming quarter, as market dynamics shift in response to changing availability and consumer preferences.
As per ChemAnalyst, the latest quarter-ending price of White Sugar CFR Texas was hovering at USD 815/MT.
Asia
The Asian sugar market exhibited mixed trends during the third quarter of 2024, with China being the most significantly impacted region. Prices declined during the initial two months of the quarter; however, they surged considerably in the final month. Raw sugar imports were notably low from March to June, but there was a marked increase in July, with imports reaching 398,000 tonnes. During the period from January to July 2024, China’s raw sugar imports totaled 1.57 million tonnes, with 1.13 million tonnes imported in the month of July alone. Despite this uptick in imports, demand in the Chinese market has remained modest throughout the quarter. By the end of August, a total of 8.86 million tonnes of sugar had been sold across the country, reflecting a 9.6% year-on-year increase. This rise in sales underscores the consistent demand for sugar in the domestic market, suggesting that while import volumes may fluctuate, the overall consumption trends remain stable. The latest quarter ending price of Raw Sugar CFR Shanghai was hovering at USD 556/MT.
Europe
During the third quarter of 2024, the German sugar market experienced a notable decline in prices, influenced by several seasonal and environmental factors. The holiday season in August typically leads to fluctuations in consumer demand, as many individuals travel or take vacations, resulting in decreased purchasing activity for sugar-related products. This seasonal decline in demand contributed to the overall downward trend in prices. Additionally, storms that impacted the region during this quarter further complicated market dynamics. Adverse weather conditions disrupted agricultural activities, affecting the supply chain and creating uncertainty regarding crop yields. However, despite these disruptions, the overall supply of sugar remained stable. This stability, combined with reduced demand, intensified the downward pricing trend. Looking ahead, it is anticipated that sugar production in Germany is expected to rise to 16.6 million tonnes in the 2024/25 season. This projected increase in production may influence future pricing and market dynamics, particularly as the market adjusts to the evolving balance between supply and demand. Stakeholders will need to closely monitor these developments as they navigate the challenges and opportunities in the sugar market. The latest quarter ending price of Sugar FD Hamburg was 876/MT.
South America
The South American sugar market experienced a significant surge throughout the third quarter of 2024, with Brazil being the most impacted region. This price increase can be attributed primarily to a considerable decline in sugar production due to adverse weather conditions, which have severely affected the previous crop and raised concerns about potential reductions in the current harvest. The country has been grappling with challenging weather patterns, including droughts in various areas, exacerbated by the effects of El Niño. In 2024, Brazil faced extreme weather events, notably an increase in heat waves across multiple regions. While the full extent of the damage caused by recent fire outbreaks on sugarcane production is still being assessed, officials believe that these fires are unlikely to have a significant impact on Brazil's total sugar output for the 2024-25 marketing year. In the second half of August, sugar production in Brazil’s key Centre-South region was reported at only 3.26 million metric tonnes, reflecting a 6% decline compared to the same period in the previous year. This production downturn has been further exacerbated by the recent fires in the country’s sugarcane fields, leading to additional supply disruptions and contributing to the sharp increase in sugar prices. Preliminary estimates from two of Brazil's largest sugar and ethanol producers indicate substantial damages to crops, particularly in the country’s top-producing state. These supply constraints, coupled with rising demand from certain regions in the Asia-Pacific (APAC) and North America, have placed further upward pressure on prices, intensifying concerns regarding sugar availability in the upcoming months. As per ChemAnalyst, the latest quarter ending price of Sugar FOB Santos was 485/MT.
