Source: Ukragroconsult (Ukraine)
Sugar exchange prices continued to rise this week as dry and hot weather was forecast for Brazil’s sugar-growing regions.
On the London Stock Exchange, October futures for No. 5 white sugar rose by 6.7% over the week to a 5.5-month high of USD 555/tonne (+10% for the month), while No. 11 cane sugar rose by 13.7% to its highest level since September at USD 21.16/lb or USD 466/tonne (+17% for the month).
Dry and hot weather is forecast for the states of São Paulo and Mato Grosso over the next two weeks, which will reduce sugar cane yields. In August, the heatwave in the country led to severe fires that damaged up to 5 million tons of sugar cane in the most important sugar-producing state of São Paulo.
The appreciation of the real against the dollar to a four-week high is also supporting prices, as it is hampering sugar exports from Brazil.
Rising oil prices will increase ethanol prices and reduce sugar production from sugar cane. According to the Unica association, sugar production in the Central-South region fell by 6% year-on-year to 3.258 million tons in the second half of August.