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Brazil’s Ports Slow Sugar Export


March sugar sold off yesterday after barely making a new contract high on Wednesday. The market has been in a sideways pattern for the last two months, as it has drawn support from expectations for a global supply deficit in 2023/24 but has been limited by strong production out of Brazil. The Unica supply report this week showed Brazil’s Center-South sugar production for the first half of October was 22% above year ago versus expectation for a 19% increase. Heavy rains have caused loading delays at Brazil’s ports and have slowed the export pace, but eventually they should get through. BP Bunge Bioenergia forecast Brazil’s 2024 sugar production at 41.6 million tonnes, which would be a 1.7% increase over this year. The nation’s sugar production capacity is expected to increase by 2 million tonnes per year.

sugar cubes on sugar background


Uncertainty over the US crop appears to be supporting a corrective rally off last week’s three-month lows. Heavy rains this week in west Texas have slowed harvest and are threatening to cause boll rot and discoloration. Overall sales are down sharply from last year, but that is not surprising given the drop in US production, the stronger dollar, and competition from Brazil and Australia.


December cocoa traded to new contract highs yesterday and extended those gains overnight. West African supply issues continue to underpin prices following reports that the Ivory Coast Coffee and Cocoa Board is expecting their nation’s fourth quarter port arrivals to come in 25% below last season. There is some hope that the mid-crop will be stronger, as there is a chance El Nino will end during the second quarter of 2024.  Better than expected European and Asian third quarter grindings totals have eased concerns about demand.  The EU’s Ambassador said on Thursday that Ivory Coast needs to speed up its efforts to make cocoa stocks destined for the European market comply with the EU deforestation law that will come into full effect in January 2025.


Recent rainfall over Brazil’s major Arabica growing regions has weighed on prices this week as it improves the outlook for the 2024/25 crop.  Bottlenecks at Brazil’s major port of Santos have delayed shipments, which likely played a part in the market rallying off its post-harvest low earlier this month, but eventually those exports will make it through. Stocks have been steadily declining, which is viewed as positive for demand.


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