Unstable sugar prices on the global market [World News]

Sugar quotations lower than last year

There has been a decline in sugar prices worldwide in recent months. October sugar contracts on the London Stock Exchange are 21-39% lower than last year. This situation is mainly due to forecasts for the sugar cane harvest worldwide, especially in Brazil. It is true that, due to the drought and fires in the country, sugar quotations rose slightly last week, but harvest forecasts are still high, pushing prices down. In addition, falling oil prices are reducing the processing of sugar cane into ethanol and redirecting sugar production. However, the International Sugar Organisation (ISO) predicts that next season’s global production will decrease by 1.1%, from 181.3 to 179.3 million tonnes, and that the global sugar deficit will increase compared to the current season from 200,000 tonnes to as much as 3.58 million tonnes.

India’s sugar exports on hold

India’s sugarcane harvest for the current season is exceeding forecasts due to unusually high rainfall. Despite the surplus sugar production, India is extending the suspension of its sugar exports outside the country. This is because production is forecast to fall by 2% next year, with the country’s sugar cane also used for ethanol production. The government plans to reduce the use of sugar cane for ethanol to support the domestic sugar industry. Ethanol prices will also be increased. Sustaining the restriction on sugar exports from India could lead to global supply problems and higher sugar prices.