Nov 20 / Lívea Coda

Sugar and Ethanol Weekly Report - 2023 11 20

  Back to main blog page
"Between macro developments and white's delivery, raw sugar prices didn’t show much of a change during the week. The idea that sugar might start flowing a little bit faster to the international market opposed to the macroeconomic sentiment shift enabled the recent stability seen in raw prices."

Dry weather, shipping improvements

  • Last week, the main highlight was the delivery of white sugar, with the December contract reaching its highest settlement in over 12 years at 746.6 USd/t

  • Raw sugar showed weakness despite a substantial 1.5% decline in the Dollar Index.

  • Weather improvements in Center-South and the International Sugar Organization global sugar deficit revision may explain why sugar did not respond positively to macro events.

  • Port congestion and mill crushing were affected by a rainier-than-average October, but November shows signs of improvement.

  • Dry weather is expected to persist, indicating a potential improvement in shipping pace
Last week’s main event was the white’s delivery. Expiring on Wednesday, the December contract ended at its highest settlement in over 12 years, at 746.6 USd/t. The Z/H spread suffered volatility during its last session before settling at a 12 Usd/t inverse. Nearly 263kt were delivered, below 2022’s 360kt. Brazil was the main deliverer, followed by India and United Arab Emirates’ tolling volume. The latter indicates that current white premium level – about 140 USd/t – might be enough incentive for coastline refineries in the short term, at least while Brazil is pumping sugar into the international market.

Image 1: White sugar delivery (‘000t)

Source: ICE, hEDGEpoint

Talking about raws, the week was marked by a certain weakness. While the Dollar Index experienced a substantial 1.5% decline, triggered by investors' selloffs in response to a more subdued than anticipated US inflation rate for October, the sweetener failed to register gains.

Image 2: Sugar failed to register gains amid macro sentiment shift

Source: hEDGEpoint, Refinitiv

Besides the International Sugar Organization significantly lowering its global sugar deficit projection for 2023/24 to 0.33Mt, down from the previous estimate of 2.11Mt, weather forecast improvement in Center-South might be one of the main reasons why sugar failed to respond to macro events.

Port congestion and mills’ crushing pace were penalized by a rainier-than-average October. However, November is showing improvements. In terms of lost days, November’s first fortnight registered a sharp decline, finishing below the 10-year average, at about 1.3 days. Weather forecasts show that this dryness is expected to linger, despite some rains predicted for this week. Although we might still see some repercussions from previous disruptions in loading operations, we can expect some improvement in the shipping pace.

Image 3: Lost days estimate per fortnight (No. days)/left and lost days estimate per fortnight (No. days)/right

Source: Bloomberg, NOAA, hEDGEpoint

As a matter of fact, Refinitiv Port Congestion Index for Brazil already shows a fastest loading pace with a monthly reduction of nearly 14% or a drop of 1.3 days.

This dryness is somewhat welcome strictly thinking about sugar trade flows. However, if long-lived, it might start to raise concerns over 24/25 crop development conditions, making it extremely important to watch it closely.

Image 4: Port congestion is starting to correct

Source: Refinitiv, hEDGEpoint

In Summary

Brazil is back in the game, with yields above the recent history average, area expansion, and investments in crystallization. Of course, that infrastructure might impose some restraints, but its difficult to imagine that the sector would let the opportunity slide, especially considering the recent price disparity between the sweetener and ethanol. We can expect that given favorable cane development; Brazil is set to maximize its participation in the international market also in 24/25.

Weekly Report — Sugar

Written by Lívea Coda
Reviewed by Natália Gandolphi


This document has been prepared by hEDGEpoint Global Markets LLC and its affiliates ("HPGM") exclusively for informational and instructional purposes, without the purpose of creating obligations or commitments with third parties, and is not intended to promote an offer, or solicitation of an offer, to sell or buy any securities or investment products. HPGM and its associates expressly disclaim any use of the information contained herein that may result in direct or indirect damage of any kind. If you have any questions that are not resolved in the first instance of contact with the client (, please contact our internal ombudsman channel ( or 0800-878-8408 (for clients in Brazil only).

To access this report, you need to be a subscriber.