Prices for sugar are rising due to forecasts of reduced production in India and Brazil, as well as a decrease in cultivated areas.

The price of raw sugar SBc1 rose by 0.58 cents, or 2.8%, to 21.45 cents per pound in May. This recovery followed a drop in the previous session to 20.53 cents. This information was reported by Reuters.

Alvean, a sugar trading company, stated on Wednesday that sugar production in India in 2024/25 may decrease by 9%, reaching 30 million tons. This is likely to lead to export restrictions from India and limit sugar supplies worldwide. Additionally, the rise of the Brazilian real (^USDBRL) to a weekly maximum also positively impacted the sugar situation, as a stronger currency hinders exports from Brazilian producers.

Traders reported that the improved prospects of sugar production in Thailand, the largest exporter, became one of the factors putting pressure on prices. However, they also noted that the situation in Brazil remains largely unfavorable.

The consultancy firm Datagro forecasts a nearly 5% decrease in sugar production in the Center-South region of Brazil in the new season.

An industry representative announced on Wednesday that a reduction in sugarcane planting is expected in certain Indian states of Maharashtra and Karnataka in the 2024/25 season, starting from October 1.

The price of May white sugar LSUc1 rose by 2.8% to $611.00 per ton.