Brazil sugar production concerns drive price increases

Sugar futures in New York have risen due to concerns regarding the pace of the sugarcane harvest in Brazil. The March contract increased by 1.29% to 18.80 cents per pound, marking a second consecutive day of gains. Market participants are monitoring weather patterns, as rainfall in Brazil may be delaying the harvesting process.

Reports from Hedgepoint Global Markets and the Brazilian Ministry of Agriculture and Livestock indicate that production in the Center-South region may face challenges. Data from the first half of August showed weaker-than-expected results, raising concerns about potential production declines. Sugarcane milling has experienced significant volatility, attributed to irregular rainfall patterns associated with El Niño.

While the sugar mix has increased to 51.2%, it remains below levels expected given the current price advantage of sugar over ethanol. Additionally, the ATR (Total Recoverable Sugar) has stabilized at 140.3 kg/t, which is notably below the five-year average of 149.5 kg/t for this period.