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Brazil's sugar and molasses exports during the first week of Jan-25 saw a significant decline compared to Jan-24, according to the Ministry of Development, Industry, Commerce, and Services, through the Secretariat of Foreign Trade (Secex). The daily export average dropped by 27.9%, from 144,082 metric tons (mt) in 2024 to 103,801.5 mt in 2025. Prices also fell by 8.1%, from USD 536.7/mt to USD 493.3/mt, leading to a 33.8% decline in average revenue. Total revenue during this period amounted to USD 358.5 million, compared to USD 1.7 billion in Jan-24.
According to the Union of the Sugarcane Industry (UNICA), sugarcane processing in Central and South Brazil fell by 54.3% year-on-year (YoY) to 8.83 million metric tons (mmt) in the first half of Dec-24. Sugar production declined by 63.1% to 347.8 thousand mt, while ethanol production dropped 27% to 764.5 million liters (L). Corn-based ethanol output rose by 35% to 379.16 million L. For the 2024/25 season (April 1 to December 16), sugarcane processing decreased by 4.3% to 611.85 mmt, and sugar production fell by 5% to 39.71 mmt, while ethanol production grew by 3.3% to 31.93 billion L. The average total recoverable sugar (TRS) rose 1.23% to 141.33 kilograms per mt (kg/mt) over the season. A reduction in operating sugarcane processing plants contributed to the lower output.
Shares of Indian sugar companies surged 3 to 7% following reports that India may lift its sugar export ban, which has been in place since Oct-23. Key companies, including Triveni Engineering, Shree Renuka Sugars, and Balrampur Chini Mills, saw significant stock gains. Consulting firms noted discussions of a 1 mmt export quota, with estimates suggesting India could export at least this volume in 2024/25. Despite a projected production decline to 30.1 mmt ending stocks are expected to remain stable at 8.6 mmt, supporting potential exports. A government decision is anticipated in 2025.
India's Sugar Production Falls 15.6% YoY in 2024, Ethanol Shift and Delays Contribute to Decline
As of December 31, 2024, India’s sugar production reached 9.54 mmt, a 15.6% decrease from the previous year, according to the Indian Sugar Manufacturers Association (ISMA). The decline is attributed to a greater shift of sugar to ethanol production, which rose to 4 mmt, and delayed operations in Maharashtra and Karnataka. The number of sugarcane processing factories also dropped to 493, down from 512 last year. ISMA expects domestic sugar consumption to decline to around 28 mmt in 2024/25, with a lower domestic sales quota for the first four months of the season, 700,000 mt less than last year.
Researchers at Indonesia's Center of Reform on Economics (CORE) have called on the government to ensure that the recent ban on consumer sugar imports does not lead to price increases. Indonesia currently meets 63% of its sugar demand through imports, to achieve 90% self-sufficiency. Researchers noted that domestic sugar production is hindered by low sugarcane yields, which are significantly lower than Thailand's, and outdated machinery in many sugar mills. These emphasize the need to revitalize the sector to boost sugar production and improve yield. The government has imposed a ban on several food imports, including sugar, as part of a strategy to promote food self-sufficiency and support local farmers.
In 2024, Ukraine's Poltava region produced 1.4 mmt of sugar beet, ranking 4th nationally in sugar beet production. Three sugar factories processed this output, yielding 219.6 thousand mt of sugar. The region cultivated 30.3 thousand hectares (ha) of sugar beet and expanded its irrigated farmland by 364 ha, reaching 6,907 ha under state irrigation systems. Agriculture accounts for 16% of the region's gross value added, with agricultural and food products comprising 51% of total exports in 2024, marking a 45% increase in export volume compared to the previous year.
Brazil's sugar prices saw a modest decline in W3, falling 1.92% week-on-week (WoW) to USD 0.51/kg, marking a 13.56% decrease YoY. This drop follows three weeks of price stability after a previous upward trend, suggesting some price volatility in the market.
Central and Southern Brazil's sugar production in Dec-24 faced significant challenges due to a 54.3% YoY decline in sugarcane processing, which dropped to 8.83 mmt. This led to a 63.1% decrease in sugar output and a 27% drop in ethanol production. The overall decrease in sugarcane processing, which is down 4.3% year-to-date for the 2024/25 season, reflects reduced operating capacity in processing plants.
These factors indicate that current sugar prices may remain under pressure due to lower production levels, while ethanol's growing share of output could shift market dynamics. Future price movements will likely be influenced by the balance between reduced sugar supply and potential shifts toward biofuel production, particularly as corn-based ethanol output continues to rise. Traders and market participants should monitor these production shifts closely, as they could have significant implications for sugar prices moving forward.
In W3, the United States (US) sugar prices remained stable at USD 0.40/kg but experienced a 23.08% YoY decrease from USD 0.52/kg, indicating a broader downward trend in the market. This stability is influenced by external market factors, including potential changes in US policy that could impact agricultural practices or trade dynamics, although their immediate effect on sugar prices remains uncertain. US sugar prices are likely to remain stable with limited upward movement. However, shifts in domestic policies or international trade could influence future price fluctuations.
In W3, Mexico's sugar prices remained stable at USD 1.10/kg but experienced a 37.50% YoY decrease from USD 1.76/kg, reflecting broader market trends and potentially signaling future price volatility. The Mexican sugarcane sector has seen yield improvements, profitability, and innovation, contributing to national food sovereignty. This includes collaborations between growers, mill workers, and industrialists, which have led to more efficient production methods. The Mexican government has focused on enhancing food security and creating more sustainable practices, such as increasing the use of bagasse for energy and biofuels.
Given the focus on innovation and the growth of the sugarcane industry, future sugar prices may be influenced by Mexico's ability to expand production, increase exports, and enhance efficiency. However, the continued decline in domestic prices suggests that international market conditions, including competition from major producers like Brazil and India, may also play a significant role in shaping Mexico's sugar price trends moving forward.
Pakistan's sugar prices remained stable at USD 0.45/kg in W3, despite a 10% YoY decline. This price stability coincides with a notable surge in sugar exports to Afghanistan. The exports 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 the Pakistan's federal cabinet’s approval in Oct-24 to authorize an additional 500,000 mt of sugar exports, which has significantly bolstered trade with Afghanistan.
While the export surge has strengthened Pakistan’s trade relations and contributed to higher export revenues, it poses potential risks to domestic sugar availability. The sharp increase in export volumes could strain local supply, especially if domestic demand remains steady. This may lead to upward pressure on local sugar prices in the coming months, as tighter supply could offset the current price stability. Given the substantial export increase and the potential for reduced domestic availability, Pakistan’s sugar market may face upward price pressures if the export trend continues. However, the exact trajectory will depend on factors such as domestic production levels, government policies on export quotas, and overall market demand. If these dynamics persist, sugar prices may see gradual increases or volatility in the short term.
With Brazil's significant drop in sugar exports and India’s potential to lift its export ban, traders and sugar producers should closely monitor shifts in global trade policies. Exploring alternative markets or adjusting export strategies could mitigate risks associated with fluctuating export volumes and maintain revenue stability.
Given the growing share of ethanol production in Brazil and India, sugar producers should consider expanding their biofuel output. This could help diversify income streams and align with global biofuel trends, which are becoming increasingly important due to environmental policies and energy demands.
In markets like Indonesia and Mexico, improving local sugar production through modernization efforts, such as updating machinery or enhancing yield efficiency, could reduce reliance on imports and improve competitiveness. Producers should invest in technology and sustainable practices to enhance domestic supply and meet growing consumption needs.
Sources: Tridge, Noticias Agrícolas, UkrAgroConsult, Super Agronom, ING, Gobierno de México
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