What’s Ahead for Sugar Prices?
The Sugaright Sales Team joined the many attendees of the Sosland Purchasing Seminar held last week in Kansas City to hear predictions from the experts. All in attendance heard relatively optimistic pricing forecasts for most commodities; sugar being the exception.
Some major insights, compliments of Sosland Publishing:
The High Plateau
High, high and high. Ron Sterk, Editor, reported that the market has reached a “high plateau” as there are no indications of prices softening for a while. “No sugar being sold in the 30-cent range ever and none being sold in the 40-cent range for at least a long time”. Charts showed all of the global markets hitting decade year highs.
Supplies Disappoint Amid Strong Demand
Mexico’s sugar production forecast is down 13% y/y, another US beet processor is in force majeure and there is lower than expected production in India and Thailand. Couple this with higher demand than expected in the US, and the higher prices are easily explained.
Most sales for 2023-24 were completed in low to mid .50 to .58/lb for beet sugar and in .56 to .58/lb for refined cane depending on region. Current beet sugar prices for calendar 2024 at .56 to .58/lb; cane offered at .61/lb NE/WC, .56-.59/lb Gulf/SE.
The Band-Aid: US High-Tier Imports
High-tier imports have been above 200,000 tons for four consecutive years. This level of imports happened only once prior to 2020. And these high levels are expected to continue.
These imports may come at a price, but they assure an adequate supply to the food industry.
Initial 2023-24 Projects Less Beet, More Cane
Initially, beet sugar production forecast down 3% from 2022-23. Cane sugar forecast is up 3.3%, highest on record.
Global Sugar Market Mixed
Large 2023-24 cane harvest underway in Brazil moderated world raw sugar prices; but high demand for exported soybeans and corn may create export delays at ports.
World raw sugar prices have had an out-sized impact on US domestic raw sugar prices due to strong high-tier imports.
European crop expected lower due to pesticide ban.
El Nino may negatively impact 2023-24 Asian sugar crop.
Final Thoughts
Major changes to sugar program unlikely in 2023 farm bill.
Reformulation efforts are reducing use of HFCS more significantly than sugar.
The “war” on sugar is not winning many battles; but the FDA and the WTO continue to promote reduced sugar consumption locally and globally.
The Sugaright Sales Team was at the Sosland Seminar so they may be fully informed about all and every factor that can potentially impact the market. An informed supplier means an informed buyer.
Please reach out to learn more.
