(Bloomberg) — Global sugar supplies are seen shrinking to the lowest level in six years in early 2025 as drought hampers production in top exporter Brazil, according to commodities trader Czarnikow Group Ltd.
Extreme dryness has eroded sugar-cane crop conditions, limiting mills’ ability to produce sugar in the latter months of the current season and signaling a delayed start to next year’s harvest, Pedro Mizutani, Czarnikow head of raw sugar trading, said during a conference in Sao Paulo.
Concerns about production constraints in Brazil — also caused by the spread of plant disease — have kept prices for the sweetener above the historical average for the past several years, underscoring the world’s dependence on the South American nation’s supplies. The country is expected to account for almost 75% of all raw sugar traded globally this year, according to consultancy firm Datagro.
Sugar-cane harvesting in Brazil’s main production region isn’t expected to start before the second half of April, weeks later than usual, according to Mizutani. The premium traders pay for sugar for March delivery over supplies for May has surged since September, reflecting tightness.
Supplies should be “very tight” in the first quarter even as lower production in Brazil is being tempered by easing demand and a bigger crop in China, Luiz Silvestre Coelho, the chief trader at Sucres et Denrees SA in Brazil, said during the same conference.
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