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Prices for sugar are falling due to increased production in Brazil and the weakness of the Brazilian real - a sugar market overview.
agricultural products
Sugar

Prices for sugar are falling due to increased production in Brazil and the weakness of the Brazilian real - a sugar market overview.

Last week, sugar prices decreased in both New York and London. This morning, prices dropped to a minimum due to increased sugar production in Brazil. The weak exchange rate of the real is also putting pressure on prices.

26 June 2024 26 June 2024

Last week, prices for May world sugar No. 11 in New York (SBK24) closed lower by -0.43 (19.82; -2.10%). At the same time, May London white sugar ICE No. 5 (SWK24) ended trading with a decline of -13.90 (589.20; -2.21%).

This morning, sugar prices cautiously declined: sugar in New York reached a 13-1/2-month low, and in London reached a 13-month low, according to the company's information.

An increase in sugar production in Brazil led to a decrease in prices. Unica reported that sugar production in the Center-South region of Brazil in the second half of March was 183,000 tons, which is 9% more than last year. In addition, sugar production in Brazil in March of the 2023/24 marketing year increased by 25.7% compared to the previous year, reaching 42.425 million tons. Brazilian sugar mills increased sugarcane processing volumes to produce more sugar and less ethanol. This year, mills processed 48.87% of the total sugarcane amount for sugar production, compared to 45.86% last year.

The depreciation of the Brazilian real exchange rate (^USDBRL) also negatively impacts sugar prices. On Monday, the real reached a 6-1/4 month low against the dollar. The weakness of the real stimulates export sales by Brazilian sugar producers.

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