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Frost forecast for this week sends sugar almost back to 20 cents/lb

Sugar futures prices ended the session this Monday (16th) with a rise of more than 2% on the New York and London stock exchanges. The market was supported by fears of frost over the new crop in Brazil, in addition to the financial ones.

The main maturity of raw sugar on the New York Stock Exchange rose 2.66%, quoted at 19.68 cents/lb, with a high of 19.70 cents/lb and a low of 19.28 cents/lb. In London, the first contract rose 2.52%, trading at US$ 549.20 a ton.

The market in New York almost returned to 20 cents/lb this beginning of the week with the forecast of frost in the Center-South of Brazil in the coming days, which raised concerns about the new crop, which should be of a slight recovery compared to the previous one. .

Harvesting and processing for the 2022/23 cycle is underway in the country's main producing region.

"Between Wednesday and Thursday there is a risk of frost to the north of the state of Paraná and this crop is coming from a partial recovery, which can jeopardize this recovery", says the analyst at Safras & Mercado, Maurício Muruci.

The market also found support from financials, with oil rising about 3% with attention to sanctions on oil from Russia, a major supplier to Europe. In addition, attention is paid to exchange rate fluctuations.

Oil is fundamental for the decision on the mix of plants, while the exchange rate impacts exports.

"[There are] talks that Brazil should favor ethanol production this season over sugar," the Reuters news agency said on the sugar-energy market. The price of ethanol has compensated more for the mills.


The advance of the 2022/23 crop in the Center-South continues to put pressure on the sugar market in the Brazilian market. On the last trading day, the CEPEA/ESALQ indicator for sugar, Icumsa color from 130 to 180, São Paulo market, rose 0.57%, trading at R$ 131.96 per 50 kg bag.

In the North and Northeast regions of Brazil, sugar was quoted at R$ 153.83 per bag and a drop of 0.01%, according to data collected by consultancy Datagro. VHP sugar, in Santos (SP), had a FOB price of US$ 20.29 c/lb on the last day of calculation, an increase of 2.80%.


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