As much as 5 million metric tons of sugar cane could have been lost in Sao Paulo due to fire, according to two preliminary estimates from Green Pool Commodity Specialists and financial services firm FG/A based on satellite images that could be imprecise, Bloomberg reported on Aug 26. Earlier estimates in June projected a record sugar output of 46.29 million tonne from Brazil this year, leading to a crash in global price of sugar. However, that has now turned on its head with the latest wildfires in Brazil. Raw sugar futures climbed as much as 4.2% in New York on Monday, August 26, the biggest intraday jump in a month.
However, Indian sugar stocks aren't excited because the opportunity to make the most out of a surge in export prices isn't available to them. since October 2023, the Indian government had restricted sugar exports to control prices at home.
Over 60,000 hectares of Brazil's largest sugar producing region in Sao Paulo have been affected by wildfires of an unprecedented scale. “In 20 years in the business, I had never seen anything like it,” said Almir Torcato, executive director at cane growers association Canoeste, which represents over 2,000 farmers.
Brazil is the world's largest sugar producing nation, accounting for a quarter of the world's supply, according to latest data from US Department of Agriculture. India is the second largest producer at 19% of global supply. A reduction in sugar supply from Brazil may lead to a higher demand from countries like India, followed by Thailand and China. In the picture above, you can see burnt trees lie next to condominiums as wildfires rage in Sao Paulo state, Brazil's largest sugar producing region, Aug. 25, 2024. (AP Photo/Marcos Limonti)
