
Market Dynamics Overview
"This week, India was a focal point with rumors of easing import restrictions adding to the bearish market sentiment. The country's sugar production is lagging by 17.8% compared to the previous season, mainly due to crop start delays, though January primary results reduced this difference to 15.3%."
Market Dynamics Overview
- India's sugar production was lagging by 17.8% in December, compared to the previous season, mainly due to crop start delays. January primary results reduced this difference to 15.3%.
- The country reported lower average sugar recovery, raising doubts about its production and export capacity.
- India's domestic sugar prices have corrected sharply but faced resistance recently, making export parity more stable than international prices. This reduces the incentive for Indian millers to export.
- The market currently views India as more of a bullish factor than a bearish one, but the situation could change based on the next two months' results and political decisions.
- Brazil's higher availability has compensated for uncertainties regarding India. Crushing over 1Mt and reaching 613Mt by the end of December, Brazil's season is expected to end with over 620Mt of cane crushed, producing nearly 40Mt of sugar and enabling healthy exports.
Last week, India was the highlight. Rumors that the country might ease restrictions on imports added to the already bearish sentiment in the market. As discussed in previous reports, India’s production shows sluggish results, lagging about 17.8% by the end of December compared to the previous season. Nevertheless, most of this difference can be attributed to crop start delays. One reason that supports this view is that, in December, crushing was in line with 2023 results. Secondly, January results reduced the difference to 15.3%.
However, the country has reported lower average sugar recovery, which might signal that we are overly optimistic regarding its possible production and capacity to export. Yet, the market’s average estimate for India’s production, at roughly 28Mt, would mean that the country would need to consume stocks to match the over 29Mt sugar consumption, making export rumors highly unlikely – and that is not what the market seems to be pricing.
Image 1: Sugar Balance - India (Mt Oct-Sep)

Source: ISMA, AISTA, ChiniMandi, NFCSF, Hedgepoint
Image 2: India Domestic Prices vs International Market ( USD/t)

Source: Refinitiv, Hedgepoint
Image 3: Bi-weekly sugarcane harvested at Center-South mills (M ton)

Source: Unica, Hedgepoint
Image 4: Raw Sugar Santos FOB Premium - Prompt Monthly Average (USc/lb)

Source: Refinitiv; Hedgepoint
In Summary
Weekly Report — Sugar
livea.coda@hedgepointglobal.com
laleska.moda@hedgepointglobal.com
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