Sugar Prices Hit Three-Year Low Amid India's Export Move: Report

Sugar prices plummeted to a three-year low on Monday after India, the world's second-largest sugar producer, announced plans to export 1 million metric tons of sugar in the current season, which ends in September. According to a Reuters report on Sunday, the Indian government aims to support struggling sugar mills and stabilize domestic sugar prices, which have been under pressure in recent months. Although there had been speculation for weeks that exports would be allowed, the decision surprised some traders as this season's production is expected to fall below consumption for the first time in eight years.
"The news is likely to keep pressure on global prices," said ING's head of commodities strategy Warren Patterson. White sugar futures on the ICE exchange, used as a global benchmark to price the sweetener, hit $470.20 a ton earlier, their lowest since September 2021. They later traded down 1% at $473.60 a ton, bringing losses for the year to more than 5%. Raw sugar futures did not trade due to a U.S. holiday, but closed down 1% at 18.22 cents per lb on Friday.
India's production could fall to around 27 million tons from 32 million tons last year and below annual consumption of more than 29 million tons, according to leading trade houses in the country. New Delhi did not allow exports in the previous season. A Europe-based sugar industry expert told Reuters that while he too expected India to produce around 27 million tons this season, one leading trade house had been promoting the view that output would be significantly higher. India's sugar mills, meanwhile, expect next season's production to recover.
Sugar prices have also faced downward pressure this year due to concerns that Thailand may increase sugar exports after suspending syrup shipments to China. China has requested that Thailand inspect numerous factories before resuming negotiations to lift a ban on sugar syrup and premixed powder exports from the country, imposed last month. Meanwhile, in other soft commodities, London cocoa prices dropped 0.6% to $98,905 a ton, while robusta coffee prices climbed 1% to $5,057 a ton.

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