New data from the European Commission gives an impression of what the wet weather has caused to sugar beets in Europe. The expected yield per hectare has been adjusted downwards for June. In addition, reports about Brazilian and Indian sugar production continue to play a major role in the listings of London and New York.
Excessive rainfall in Europe in recent months has affected several crops. This is now also confirmed in the latest JRC Mars Bulletin from the European Commission. An abundance of water has hampered crop growth in the Benelux, western Germany, northeastern France and northern Italy. Previously, a quantity of 75,4 tons of sugar beet per hectare was expected in May, and this has been adjusted downwards to 74,4 tons per hectare for June. That is still above the five-year average of 73,2 tons per hectare.
The rising tone in the sugar quotations in New York and London is now becoming more apparent. Apart from the extremes, prices are slowly moving upwards. In mid-May, prices fell to almost the lowest point in a year and a half, partly driven by the relatively strong start to the Brazilian season. Since then, the price has risen and now stands at $427,92 per tonne in New York and $570,10 per tonne in London. Now New York is at the highest point in more than a week, London rose to the same level in more than a month and a half.
On the one hand, the increase contrasts with the last published Unica data, Brazil's sugar association. The number one sugar cane producer milled 140,7 million tons of sugar cane from the start of the season to the end of May. This is 11,2% above the level of the same period last year. Area expansion and favorable weather conditions, among other things, have led to a good start to the season.
But there is another country about which reports are currently less positive. Last week we wrote about the monsoon rains in India which remained at last year's level. That is not conducive to the production of the third largest producer. Last Friday, news medium Reuters reported that heavy rain had fallen again in some parts of India and even heavy flooding in the Northeast. If the rains come, it will probably give production a boost. Analysts also write about increased concerns about the currently applicable Indian export restrictions. The Indian government has announced that it will not yet revise the restrictions again. That news is also likely to boost sugar prices on futures markets.