After the initial impact caused by Covid-19, world sugar prices are starting to rebound. The ICE #11 Raw Sugar futures finished the third week of June at USc 12.18/lb, a recovery of almost three cents since the end of April. This is also related to Brazilian sugar, as there were difficulties moving it out of the ports due to long waiting times.

 

“Rabobank decreased the global consumption estimate from flat to a 1% decline. This is due to the detrimental effects the pandemic is having in countries such as India, Indonesia, and Brazil. Countries like the US and Mexico should experience minimal impact, as the higher usage of HFCS in soft drinks minimises the decline in sugar demand for beverages,” says Andy Duff, global strategist – sugar.

 

Rabobank anticipates a 4.3m metric tonne raw value (mtrv) global deficit through the 2019/20 (Oct-Sep) season, up from the previous estimate of 6.7m mtrv, as they lowered their global consumption forecasts. For the 2020/21 season, they anticipate the market will go back to having a surplus of 0.85m mtrv. “We expect consumption to recover from the pandemic and go back to trend growth in 2020/21, resulting in a 1.7% increase. Global production is expected to increase by almost 5%, driven by a recovery in Indian and North American crops,” according to Duff.