This month, the ISMA published its

first advance estimate of India's net

domestic sugar production in 2023-
24 of 30.2m metric tonne, 7% lower
than its preliminary forecast in July
2023.
_____________________________

Up to the first half of November, C/S

Brazil mills were able to maintain a
strong pace of crushing operations.
However, as rainfall is forecast to
increase seasonally in the coming
months, there are mounting
concerns about whether sugar
production and exports will be able
to meet near-term expectations.
_____________________________

Despite lacking fresh sugar-specific

fundamentals, ICE #11 sugar futures
prices are resilient near the 27
cents/lb threshold.
________________________________

For information on the United States

sugar market, please see the US
Sugar Market Insight report in
THIS REPORT IS FOR THE USE OF LICENSED USERS ONLY. COPYRIGHT © 2023 MINTEC LIMITED Mintec Analytics.
________________________________

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links and recordings, please click
here.
 • Having tested the 28.00 cents/lb resistance
threshold to no avail during the first half of the
month, the ICE #11 (New York) raw sugar
futures rally lost steam during the second half of
November. The prospect of a looming
supply/demand deficit has not changed.
Consequently, the front-month futures contract
was resilient, settling at 27.20 cents/lb
($599.66/mt), or 0.4% higher m-o-m. Following
suit, the May 2024 contract settled at 25.94
cents/lb ($571.88/mt), resulting in the nearby
spread at a premium of 126 points

• Mirroring raw sugar futures, the ICE #5 (London)

white sugar contract ended 1.7% higher m-o-m,
at $745.60/mt. In response, the ‘white premium’
(the refiners’ margin) increased by $10.17/mt to
Source: ICE via Mintec Analytics $145.94/mt (basis Mar/Mar)
• On the back of attractive sugarcane prices and
improving weather conditions, many market
participants increased their Thailand sugar production
estimates for both the 2023/24 and 2024/25 crop
years
• The dry weather in the first half of November helped
increase the pace of operations in C/S Brazil,
corroborating the view that mills are eager to extend
the tail of the 2023/24 crop amid ample sugarcane
availability, contingent on weather

• For the latter, we heard estimates pointing to around
100m metric tonnes, representing an impressive 30%
increase year on year (based on the average estimate
for the 2023/24 crop year of 72m metric tonnes)
• Port operations were also positively impacted by this
weather. For November as a whole, raw sugar exports
(bulk basis) are expected to reach around 2.7m metric
tonnes TQ - a record for the period, should it
materialise

• Looking forward, the volume of rains in December will

be key in determining the size of the Brazilian crop
and if this supply will reach the world market
• In light of the National Oceanic and Atmospheric
Administration’s (NOAA) forecast of the El Niño
continuing until the end of May 2024, weather is
expected to be a key driver of global sugar prices
• With the progress of the C/S Brazil crop proceeding at
a strong pace, adding to the belief in greater sugar
supply, the sugar bears have awoken
First, prices tested the 28 cent/lb
barrier to no avail. Then, on the back of
the view of greater C/S Brazil sugar
supply, prices trended towards the 27
cents/lb support.
Now, the market is looking for a new
trigger to drive its next move, towards
the upside or the downside.
 Global sugar S&D balance (million metric tonnes) versus Stock-to-Use
ratio (%)
12 50%

It seems the world still lacks sugar. Despite incorporating the prospect of even greater C/S Brazil 48%
sugar supply in the 2023/24 national crop year (Apr-Mar basis), the overall consensus still 10
projects a material global S&D deficit for the 2023-24 marketing year (“MY”, Oct-Sep basis),
with estimates ranging from -5.0m to -3.0m metric tonnes. 46%
8
The lingering question is: “With additional supply less likely, at what price point is demand
deferred and/or destroyed?“ 44%
6
In fact, at the latest International Sugar Organization (“ISO”) seminar hosted in London, one
speaker stated that world sugar values need to rise above the 12-year highs of 28.00 cents/lb 42%

S&D Surplus/Deficit

Stock-to-Use Ratio
for the world market reach a balance: “We need the market to get to a level where we start to 4
ration demand.” This view is underpinned by the estimate of sugar being trapped within C/S Brazil
due to limited logistics capacity at the ports (amid ever-increasing competition between sugar and 40%
grains). 2
It is noteworthy that additional elevation capacity at major Brazilian ports is expected to 38%
become available only by 2025 (namely Cofco’s and CLI’s terminal expansion). Thus, for the
0
entire C/S Brazil exportable surplus to reach the world market, grains must give away part of its
36%
logistics – a scenario many market analysts deem highly unlikely.

This is the major divisive factor in the sugar market at the moment: the bulls lean on the inability -2
34%
of major C/S Brazil ports to bring the supply to the world market, while the bears believe it should
materialise.
-4 32%
One way or the other, amid this sugar market dragged by external macro-economic factors, the
task for all analysts is to identify the next trigger that will dictate the direction for sugar
prices – all converging to the pace of C/S Brazil exports in the coming months. -6 30%
On the demand side, the large volume from C/S Brazil destined to China has soothed concerns of 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24E
one of the largest importers being dormant. According to the latest Brazil vessel line-up data, S&D Surplus/Deficit Stock-to-Use Ratio
1.8m metric tonnes have already sailed to Q3 2023, with another 1.5m metric tonnes set to sail in
Q4 2023.
Source: TRS
 Cumulative C/S Brazil sugar production (million metric tonnes)
42

According to the most recent bi-weekly UNICA report, C/S Brazil mills crushed 34.8m 34
metric tonnes for a sugar production of 2.2m metric tonnes (on a tel quel basis) during the 26
first half of November. To date, 595m tonnes of sugarcane was crushed (up 15.0% year
18
on year and 1.6% higher than the 2020/21 national crop year [Apr-Mar basis], when
total crushing reached 605m metric tonnes). Cumulative sugar production to date was 10
39.4m metric tonnes (up 23.1% y-o-y), thus establishing an all-time record high. 2
In response to the continued strong pace of operations, many market participants have

1H Dec
2H Dec
1H Sep
2H Sep

1H Feb
2H Feb
1H Nov
2H Nov

1H Jan
2H Jan
1H Apr
2H Apr

1H Jun
2H Jun
1H May
2H May

1H Aug
2H Aug
1H Jul
2H Jul

1H Oct
2H Oct

1H Mar
2H Mar
-6
further increased their estimates of sugarcane crush and sugar production for the
2022/23 national crop year to an average of 625m (13m higher from a month ago) and
40.4m metric tonnes (1.1m higher), respectively.
19/20 20/21 21/22 22/23 23/24
The latest Brazil sugar vessel line-up data indicates that 1.2 million metric tonnes of Sources: UNICA, elaborated by TRS
raw sugar was loaded in the first 22 days of November. However, above-normal
rainfall in the second half of the month should result in a slowdown in port operations. For
the whole month, total C/S Brazil raw sugar exports are estimated to be around 2.7 million
metric tonnes (0.6 million metric tonnes higher month-on-month and a historical record
C/S Brazil raw sugar exports (million metric tonnes)
3.5
for the period). Exports represented by
3.0 lighter shade is up to
While there is a consensus that C/S Brazil will likely produce around 41.0m metric tonnes 22nd November 2023.
2.5
of sugar in the 2023/24 crop year (2.5 more than the previous benchmark), concerns
about the lack of available sugar logistics at major ports have increased further. 2.0

There are rumours that several players active in the physical sugar market were 1.5
unable to secure additional elevation capacity for the end of Q4 2023 and Q1 2024. 1.0
The forecast rainfall, possibly slowing sugar loading at the ports, only increases the risk
that the anticipated volume of C/S Brazil sugar supply will not reach the world market 0.5
when expected. 0.0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
All told, the question remains: Will C/S Brazil be able to export all this extra sugar to
the world market? Market sources expect weekly C/S Brazil line-up data to be one of the 2022-23 2023-24 5-Year Avg
major drivers for the direction of sugar prices in the near term. Sources: Williams, elaborated by TRS
 Uttar Pradesh weekly cane crushed (million metric tonnes)
8
7
According to the National Federation of Cooperative Sugar Factories in India, only 263 mills began 6
harvesting in the first fortnight of November, compared to 317 units operating at the same time a
5
year ago. As of 20th November, the total sugarcane crush was 16.2m metric tonnes,
resulting in 1.2m metric tonnes (on a tel quel basis) of sugar production, or 8.4m and 0.7m 4
metric tonnes lower year-on-year. 3
2
Meanwhile, the farmer associations demand that mills pay higher prices for sugarcane this
season. The Government of India (“GoI”) has announced a Fair and Remunerative Price (“FRP”) of 1
INR 3,150 per tonne of sugarcane in the 2023/24 crop year. However, farmers are pushing for a 0
minimum price of at least INR 4,000 per tonne to offset losses caused by the erratic weather Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
during the monsoon season.
Range 21/22 22/23 23/24
Considering the limited availability of sugarcane this season against the ever-increasing crushing Sources: TRS

capacity, there is a strong possibility of the Indian mills fiercely competing against each
other for sugarcane to crush. On top of higher sugarcane prices, this could result in a material
volume of immature sugarcane being crushed and, in turn, even lower than expected agricultural
Maharashtra weekly cane crushed (million metric tonnes)
yields – a repetition of what happened last year. This is reflected by downside risks to current 9
estimates of India's domestic sugar production of around 30.0m metric tonnes in the 8
2023/24 crop year – a view also shared by the ISMA in its advance estimate of domestic sugar
7
production of 30.2m metric tonnes.
6
The results of the first tranche of the ethanol tenders indicate that 3.64 billion litres were 5
contracted, only 44% of the target volume of 8.25 billion litres for the 2023/24 ethanol year (“EY”; 4
Nov-Oct basis). The lower year-on-year sugarcane ethanol offered in the tender is symptomatic of 3
low sucrose availability. Thus, amid the prospect of a tight domestic sugar market, many 2
market participants ponder if more sucrose will be diverted back towards sugar
1
production. Even if this scenario does materialise, there are no expectations that any domestic
0
sugar will be exported this crop year. Estimates of 'zero' Indian sugar supply prevail.
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
On 14th November 2023, the GoI ordered mills to sell 0.8m metric tonnes of sugar domestically in
Range 21/22 22/23 23/24
November 2023. This comes in addition to the first tranche of the monthly sales quota of 1.5m Sources: TRS
metric tonnes, issued on 23rd October 2023. As a result, the total November 2023 monthly
domestic sugar sales quota stands at 2.3m metric tonnes.
Only recently, indications were that the warm weather witnessed in early
autumn this year was mostly beneficial and that sugar beet yields may
overall reach slightly above the five-year average. But recent French and
German sugar beet harvest estimates have been disappointing.

As may be expected given the recent excessive rainfall and a lack of sunshine
this year, factory sampling has found that sugar content has been stubbornly
slow to improve as the campaign has progressed. The late sowings this year, the
summer drought on light land and increased root hydration in wet soils have all
conspired to reduce sugar levels and, hence, to reduce overall sucrose
production estimates. Conditions have deteriorated in most of western,
northern, and central Europe, and have hampered the harvest. Sugar beet
fields in some regions - Nord-Pas-de-Calais, for example, the Somme, and in
Benelux and East Anglia – have been submerged in water, and many fields and
hard surfaces in farmyards have become impassable. Unsurprisingly, therefore,
the harvesting of beets has fallen behind schedule and is now compromising
adequate supplies to the factories. The factories have chosen different methods
to manage the situation. And now, the spectre of frost damage could become a
problem if the harvest continues to be delayed.

These weather and disease calamities have resulted in a lower outlook for the
EU and UK sugar beet crops, the total of which is now expected to reach
around 16.5 million tonnes, about 500,000 tonnes lower than the projections of
a month or two ago.

Sources: European Commission

Measuring the gap between the wide ranges of EU/UK and world market prices is never
completely precise – the best that can be done is to give a rough indication. That said, the
gap between average EU sugar prices as determined by Eurostat, Taxud and ONS data,
and London #5 white sugar futures has fallen from around €300/t at the beginning of
calendar 2023 to around €100/t today. Note that these EU prices are CIF (or hypothecated
to EXW), and that world market prices are FOB, hence the ‘real’ gap, due account being
taken of transport costs and logistics, will be much smaller when one’s profit and loss
account is accrued.

Given these indications, one may speculate that increasing imports of sugar from Ukraine
on the one hand and generally rising world market prices, on the other hand, could lead
to the EU/world market price gap narrowing further.

Moreover, there are some significant regional differences. For example, the price gap is
smaller in Eastern Europe, including in the Baltic States, than in Iberia or the Scandinavian
countries, likely owing to the recent surge in imports from Ukraine after the Ukrainian
export ban was lifted.

As prices in the EU have been reducing overall in October and November, the quantities
of sugar recorded in the trade statistics as being exported have increased from around
25,000 tonnes a month to more than 50,000 tonnes a month (the latter based on Taxud
data which is likely an underestimate), leading to speculation that EU exports might
increase year-on-year and find homes where once Ukrainian sugar would have been
present in the market.

It may also be an instructive indication to note that the market for IPR sugar has fallen
alongside the fall in the price gap. The price of INF5 licences is said to have fallen from
around €250/t seen at the end of last year to around €25/t today. It may be similarly
interesting to note the large increases in quantities of raw sugar imported for refining
under the IPR scheme, especially in Spain and Portugal.

For information on the United States sugar market, please see the US Sugar Market
Insight report available in Mintec Analytics. Source: Mintec based on Eurostat and ONS trade data
 Pakistan domestic sugar premium/discount to ICE #5 (London) spot price
($/MT GOB) vs. exported volume (thousand metric tonnes)
300 300

To tame inflation and ensure food security, in early-November the Government of

Thailand (GoT) decided to categorise sugar as a controlled commodity. Many market
participants assumed that this decision would limit and/or slow the pace of sugar 200 200
exports, resulting in a wave of criticism aimed at the GoT. Trying to soothe concerns, in its
latest statement the GoT suggested that the decision would be reviewed (more likely to
be unwound). 100 100

Premium/discount

Exported volume
0 0
According to Ukraine’s National Association of Sugar Producers (Ukrsugar), higher-than-
expected sugar beet agricultural yields and acreage should result in a strong recovery in
sugar production in the 2023/24 crop year. For the entirety of the season, Ukrsugar
-100 -100
estimates sugar production at 1.7m metric tonnes TQ, or 0.4m metric tonnes TQ higher
year-on-year.

-200 -200

The sugar industry is pushing the Government of Pakistan (GoP) to allow 250K metric
-300 -300
tonnes of domestic sugar exports during the 2023/24 crop year. The Pakistan Sugar Mills
Association states that domestic sugar exports could help the domestic sugar industry to
increase revenues, allowing them to make timely payments to farmers and alleviate the
increasing risk of limited sugar storage capacity. As of 22nd November, the average -400 -400
domestic sugar price was PKR 137/kg, resulting in an indicative FOB price for Pakistan-

Oct-20
Apr-15

Apr-16

Apr-17

Apr-18

Apr-19

Apr-20

Apr-21

Apr-22

Apr-23
Oct-14

Oct-15

Oct-16

Oct-17

Oct-18

Oct-19

Oct-21

Oct-22

Oct-23
origin white sugar at a US$ -314/mt discount to the March 24 ICE London No.5 refined
white futures.

Monthly total sugar exports With subsidy Without subsidy

For information on the United States sugar market, please see the US Sugar &
Sweeteners Market Insight report in Mintec Analytics. Sources: PBS and SAB, elaborated by TRS
• The Brent crude oil price decreased
by 7.6% month-on-month (m-o-m) • Economic data for the Eurozone in
in November to $81.99/barrel, November 2023 are expected by
representing a 9.75% year-on-year sources to indicate inflation cooling
(y-o-y) decline. The monthly price down
decrease can be attributed to record-
high US production and the easing of • Trying to avoid sounding over-
US sanctions against Venezuela optimistic, Christine Lagarde
(European Central Bank president)
• However, continued OPEC output cuts stated: “we’re certainly not declaring
and a monthly rise in China’s crude oil victory”
imports continue to limit price
movement on the downside • Nonetheless, although not fully
dismissing the possibility of another
Source: Mintec Analytics
interest rate hike, the prospect of
slower inflation has soothed
concerns of an economic recession
• The Mintec Dollar index fell by 3.8% in the near future Source: Mintec Analytics

m-o-m, settling at 102.9,

representing a 3.7% y-o-y decline.
The Federal Reserve again paused
interest rates at its recent policy
meeting at the end of October. Some
market sources had anticipated
another 25 bp (-0.25%) increase at the
December meeting; However, with US
inflation continuing to slow, there are
now widespread expectations of
another rate pause at the next meeting
(13th December). This prospect added
bearish sentiment to the Mintec USDX
this month
Source: Mintec Analytics
ICE NY InterContinental
Exchange New York Y-O-Y The most recent assessment
price, or last traded price on an
ISMA Indian Sugar Mills exchange, compared to the
Association assessment price or last traded price
a year prior
KG Kilograms
Q-O-Q The most recent assessment
LB Pounds price, or last traded price on an
exchange, compared to the
USc US Cents assessment price or last traded price
one quarter prior
CFTC Commodity Futures
Trading Commission M-O-M The most recent assessment
price, or last traded price on an
CJEU Court of Justice of the exchange, compared to the
European Union assessment price or last traded price
at the end of the previous month
MFN Most-Favoured Nation
H1 The first half of the year
mmt Million metric tonnes
H2 The second half of the year
OECD Organisation for
Economic Co-operation
and Development

WASDE World Agricultural

Supply and Demand
Estimates