World sugar prices drop to 6-month low in January

The FAO Sugar Price Index averaged 112.8 points in January, down 3.7 points (3.1%) from December, marking the second consecutive monthly decline and the lowest level in the past six months.

The January decline in international sugar price quotations was mostly related to favourable production prospects and good harvest progress in major exporters, India and Thailand, and improved rains in key growing areas of Brazil, the FAO report reads.

In addition, lower ethanol prices in Brazil exerted further downward pressure on world sugar prices in January. However, the strengthening of the Brazilian Real against the US Dollar, which tends to restrain shipments from Brazil, the world's largest sugar exporter, prevented more substantial sugar price declines.

Previously reported that the demand for sugar in the world market is anticipated to be above the production capacity as a result of higher usage of sugar cane in ethanol production.

Related: Ukrainian Sugar Market Overview 2020/21