The global sugar market is very positive on the supply side due to higher production being forecasted for leading producers. However, some analysts have started raising concerns about India and Thailand, although it may be too soon to tell.
Additionally, there is uncertainty about the political side of Brazil, with the federal fuel tax exemption set to end in February, which may affect the production mix towards ethanol. As crude oil prices increase due to an expected increase in demand from China’s reopening economy, global sugar prices have also begun to rise.
Overall, even if some countries’ production is lower than expected, the global surplus is still a likely outcome, which would take pressure off sugar prices after 18 months of the rally due to deficits.