[Growth of sugar production in Thailand is expected to boost market confidence, and sugar futures prices rose slightly] In night trading, sugar futures tended to rebound, with the main contract fluctuating between 6,180 and 6,256 yuan, up 0.92%. A report released by the US Department of Agriculture's Bangkok branch of the Foreign Office of the United States Department of Agriculture said that Thailand's sugar production in 2024/25 is expected to reach 10.2 million tons, up 16% year-on-year, mainly due to the recovery of sugarcane production and the increase in sucrose output. However, Thailand's sugar production in 2022/23 fell by 20% year-on-year to 8.8 million tons, mainly affected by lower sugarcane production and low sugar production rates. The Indian Sugar Association said Indian sugar mills are seeking government approval to export 2 million tons of sugar to meet additional production needs in the country. In addition, foreign media reported that Philippine sugar production reached 1.86 million tons in the 2023-24 crop year, exceeding the forecast of the Philippine Sugar Regulatory Authority (SRA), up 3.57% year-on-year. Huachuang Futures analysis indicated that additional quotas for Thailand and Brazil to import sugar have turned positive, which may boost imports. Data released by Unica showed that sugar production in central and southern Brazil in the first half of April was 710,000 tons, up 30.97% year-on-year, exceeding market expectations. At the same time, the 2024/25 sugar production forecast report released by Brazil's National Commodities Corporation showed that sugar production in 2024/25 is expected to be 45.68 million tons, up 1.3% year-on-year. Considering the forecast increase in sugar production in China and India in the new season, market pressure has increased, but the domestic market is gradually Entering the pure selling phase, which will support domestic sugar prices. In the short term, sugar futures prices are expected to be very volatile. Huachuang Futures advises investors to maintain a wait-and-see attitude. Minmetals Futures said that the production cuts in India and Thailand this season were less than expected. In addition, the El Nino phenomenon may end from April to June, and the global weather is expected to return to normal. Due to high sugar prices, global sugar production is expected to increase next season. Domestically, as of the end of March, the import volume of sugar, syrup and instant powder remained high, and domestic inventories increased year-on-year. Given the possibility that domestic sugar production will continue to increase in the next crushing season and the recovery of profits from additional import quotas in the near future, the fundamentals will gradually weaken. Minmetals Futures advises medium- and long-term investors to increase their short positions when sugar prices rebound.
