News summary
ICE raw sugar futures recorded 1 per cent this weekbaccaratpink.5% increase, although the market still faces oversupply problems. Brazil's sugar production exceeds expectations and is expected to increase by 6% year-on-year in Maybaccaratpink.3%, but rising ethanol prices may affect production strategies.
Newsletter text
ICE raw sugar futures closed higher this week. Raw sugar futures prices rose significantly this week, in sharp contrast to the 18-month low set last week. On May 25, the Intercontinental Exchange (ICE)'s main July raw sugar futures contract closed at 18.41 cents per pound, up 0.15 cents from the previous week, or 0.8%. The main August contract for white sugar futures also performed well, rising 1.1%, closing at US$545.90 per ton. Bullish sentiment pushed raw sugar futures prices higher, with the July contract rising 1.5% this week. Despite this, market analysts pointed out that sugar prices have been weak in the near future due to the increase in Brazil's sugar production. According to a survey forecast by S&P Global, Brazil's sugar production in the first half of May increased by 6.3% year-on-year, totaling approximately 2.7 million tons. Analysts at Rabobank believe that although Brazil has been maximizing sugar production in the previous two crushing seasons, sugar production may decrease this season as ethanol prices rise. Data from the US Department of Agriculture further revealsbaccaratpinkThe supply and demand situation of the global sugar market was discussed. In 2024/25, global sugar production is expected to reach a record 186 million tons, and demand is expected to be 178.8 million tons. The surplus situation will continue. Brazilian production is expected to fall by 1.5 million tons to 44 million tons, but sugar production is expected to increase in Thailand, India and China, offset bybaccaratpinkThe impact of declining Brazilian production. In addition, the latest data from the U.S. Commodity Futures Trading Commission shows that as of May 21, speculators have significantly increased their net short positions in ICE raw sugar futures and options. Data showed that net short positions increased by 11,000 lots to 69,500 lots, reflecting the market's cautious attitude towards the trend of raw sugar prices.