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Sugar supplies in the US spot market have tightened, prompting some processors to begin harvesting earlier than planned to rebuild inventories, even as drought conditions raise concerns over the upcoming crop. However, overall harvest activity remained limited, with only Minnesota and North Dakota reporting progress of 2% each as of August 23, according to the report.
Activity in the sugar market was mixed, with buyers actively seeking supplies to meet immediate requirements. CZ Insight quoting market participants said lower stocks in storage bins had slowed sugar deliveries, forcing some users to supplement their needs from other suppliers. The tight availability also pushed spot prices higher.
This caused some processors to start harvesting early than anticipated to start rebuilding inventories, though it could take as long as five weeks before sugar outflows return to normal levels. However, most processors are planning to delay operations in the hope that rainfall will improve sugar beet yields. Sugar beets continue to grow until harvest, and adequate moisture could help increase both root size and sugar content.
However, drought conditions have continued to worsen impacting the growth of sugar beets. According to the latest US Drought Monitor assessment, 75% of the country’s sugar beet crop was experiencing some degree of drought as of August 25, up from 63% a week earlier.
Drought pressure has also increased in sugarcane-growing regions, with 75% of the crop affected as of August 25, compared with 55% the previous week. Conditions have been particularly severe in Florida, while drought has returned to Louisiana, adding to crop concerns already created by pasture mealybug infestations.
The tightening supply situation and deteriorating weather conditions are likely to keep the US sugar market closely focused on the progress of the new harvest.
More details: https://www.chinimandi.com/tight-sugar-supplies-push-some-us-processors-to-begin-harvest-early/