The global sugar market is experiencing a significant drop in prices, marking the deepest decline in the last eight years. According to analysts, raw sugar has decreased by approximately 22% over the year, the largest annual drop since 2017. The primary reason for this trend is the oversupply in the market.
This is reported by Finway
Record Production in Brazil and India
Key factors contributing to the price decline include high production volumes in Brazil, the world’s leading sugar exporter, as well as the recovery of production capacities in India, one of the main players in the market. These countries are expected to create a substantial surplus of supply over cautious demand, which will continue to pressure prices.
Production Issues in Thailand and Adjustments to Forecasts
At the same time, the situation in Thailand creates some uncertainty for the global market. Sugar production in this country is lagging behind last year’s figures due to delays in processing sugarcane. This has led leading analyst Claudiu Covrig from Covrig Company to lower the projected harvest for Thailand by 400–450 thousand tons.
“Sugar production in Thailand continues to surprise with its decline. Not all factories are operational, and some regions are still suffering from tensions along the border with Cambodia and a labor shortage,” said Covrig.
Despite this, he estimates that the global sugar surplus this year will be around 3.6 million tons, slightly lower than the previous forecast of 4.1 million tons. The reduction in surpluses may partially stabilize the situation in the global market in the coming months.