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The Food and Agriculture Organization (FAO) Sugar Price Index fell 5.1% month-on-month (MoM) in Dec-24 and 10.6% year-on-year (YoY), driven by improved sugarcane crop prospects in key producing nations. For the full year, the index averaged 13.2% lower than in 2023, contributing significantly to a 2.1% annual decline in the overall FAO Food Price Index. While vegetable oils, dairy, and meat prices rose, these gains were insufficient to offset declines in sugar and cereal prices.
Tucumán achieved a significant milestone in 2024, with sugar production surpassing 1.2 million metric tons (mmt), a 10% increase from 2023, driven by over 17 mmt of milled sugarcane. Record exports, totaling 400,000 metric tons (mt) with contributions from Salta and Jujuy, are projected to reach 550,000 mt in 2024. This represents an increase from just 80,000 mt exported in 2023, highlighting substantial growth in the region's sugar export capacity. The Institute for the Promotion of Sugar and Alcohol of Tucumán (IPAAT) facilitated strategic collaboration among 14 sugar mills, ensuring strong supply within Argentina and fulfilling bioethanol delivery commitments.
Brazil's sugar and molasses export revenue fell by 33.4% YoY in Dec-24, according to Secretariat of Foreign Trade (Secex) data. The revenue decline was due to a 25.2% drop in export volumes and a 10.9% reduction in average prices, which fell from USD 538.0/mt in 2023 to USD 479.1/mt in 2024.
Total shipments decreased to 2.84 mmt, averaging 135,056.3 mt per day, compared to 3.79 mmt and 189,623.1 mt per day the previous year. Monthly revenue fell to USD 1.36 billion, down from USD 2.04 billion in Dec-23.
Ukraine's sugar industry reached a record year in 2024, exporting 746.3 thousand mt of sugar valued at USD 419 million. According to the National Association of Sugar Producers of Ukraine (Ukrtsukor), this is the highest annual export volume since records began in 1997.
Key markets included the European Union (EU), accounting for 40% of exports, and the Middle East and North Africa (MENA) region accounting for 60%. Top buyers were Türkiye, with 16% of shipments, Libya with 12%, Cameroon with 8%, Somalia with 6%, and North Macedonia with 7%.
United States (US) sugar production is forecasted to reach an all-time high of 9.40 mmt in the 2024/25 season, driven by strong beet yields, according to the United States Department of Agriculture (USDA). Beet sugar output is forecasted at 5.33 mmt, up from 5.16 mmt in Dec-24, while cane sugar production remains stable at 4.06 mmt.
Improved production is expected to boost domestic sugar availability, with the stocks-to-use ratio projected at 15.4%, above the USDA's adequacy benchmark of 13.5%. Imports are forecasted to decline to 2.96 mmt, down from 3.81 mmt in 2023/24, reducing dependence on foreign supply. The strong harvest outlook could ease local market tightness and stabilize sugar prices.
Brazil's sugar prices in W2 remained stable at USD 0.52 per kilogram (kg) but showed an 11.86% YoY decline, reflecting the effects of reduced production and global market dynamics. Prolonged drought and fires in 2024 damaged sugarcane crops, particularly in São Paulo, Brazil's largest sugar-producing state, with 80,000 ha affected. The Organization of Cane Growers Associations of Brazil (Orplana) estimates losses of 5 mmt of sugarcane.
Brazil's National Supply Company (Conab) revised its 2024/25 sugar production forecast downward to 44 mmt, citing lower yields. Furthermore, the Brazilian Sugarcane Industry Association (Unica) reported a 5.1% YoY decline in Center-South sugar output to 39.711 mt by mid-Dec-24, with fewer operational mills contributing to reduced output. Stable domestic prices suggest sufficient supply, but reduced output may limit Brazil's export capacity, potentially supporting global sugar prices.
US sugar prices fell to USD 0.40/kg in W2, reflecting a 6.98% weekly decline and a sharp 23.08% YoY drop. This decrease aligns with projections of record domestic sugar production for the 2024/25 season, forecasted at 9.40 mmt by the USDA. Strong beet yields have driven the output increase, with beet sugar output expected to reach 5.33 mmt, up from 5.16 mmt in Dec-24, while cane sugar production remains steady at 4.06 mmt.
Improved domestic production could enhance sugar availability in the US, as indicated by a projected stocks-to-use ratio of 15.4%, surpassing the USDA's adequacy benchmark of 13.5%. This development has reduced the need for imports, forecasted to fall to 2.96 mmt, down from 3.81 mmt in the previous season. The ample supply could alleviate local market tightness and stabilize prices in the near term. However, potential shifts in global sugar markets, influenced by weather or ethanol production dynamics, may introduce future price volatility.
In W2, Mexico's sugar prices fell to USD 1.10/kg, representing a 2.65% week-on-week (WoW) decrease and a substantial 34.91% YoY decline. This downward trend reflects both improved domestic supply and broader market pressures. Government initiatives such as the Production for Well-being program and targeted seed distribution through CONADESUCA and Zacatepec Experimental Field have bolstered sugarcane cultivation. These efforts aim to enhance yields and introduce high-quality, pest-resistant varieties like MOTZMEX 01-403 and MEX 97-20, which have the potential to produce over 150 tons per hectare (ha) under optimal conditions.
As these new crops mature and enter commercial production in 2025, the improved efficiency and expanded sugarcane variety may further stabilize or reduce domestic sugar prices. However, introducing high-yielding varieties may also increase production levels significantly, creating potential downward pressure on prices unless offset by stronger demand or export opportunities.
Pakistan's sugar prices remained stable at USD 0.45/kg in W2, reflecting a 10% YoY decline from USD 0.50/kg. The decline coincides with a surge in sugar exports to Afghanistan, which increased nearly 30-fold in the first half of fiscal year (FY) 2024/25, reaching USD 211.8 million compared to USD 5.9 million in the same period last year. This sharp rise follows Pakistan's federal cabinet decision in Oct-24 to approve an additional 500,000 mt of sugar exports, driving significant growth in trade with Afghanistan.
While the export surge has strengthened trade ties and supported Pakistan's export revenues, it may tighten domestic sugar supply, potentially stabilizing or increasing local prices in the coming months.
Given fluctuations in sugar prices and export volumes in key producing regions, sugar exporters should explore new and emerging markets. For example, Ukraine’s success in expanding exports to MENA and the EU demonstrates the value of diversifying trade partnerships. Governments and industry bodies can help identify high-growth markets and provide logistical and regulatory support to tap into these opportunities.
The adverse weather conditions in Brazil and Mexico, which impact sugarcane yields, highlight the need for improved resilience in sugarcane farming. Producers should invest in climate-resilient crop management practices, including drought-resistant varieties and better irrigation systems. Collaborative efforts between governments and agricultural organizations could provide the necessary training and technology to mitigate the effects of weather disruptions.
In markets like the US, where strong production forecasts may ease supply constraints, producers must enhance supply chain efficiency. Governments and industry stakeholders should support local sugar industries by investing in infrastructure, processing facilities, and market forecasting tools to stabilize domestic prices and reduce import dependency.
Sources: Tridge, Noticias Agrícolas, Revista Chacra, Agravery, News Foodmate, Gob MX
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