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Insight Focus
Hurricane Helene only slightly impacted sugar market logistics last week. Despite delays, sugar production is expected to remain stable. Rising raw sugar futures highlight ongoing challenges for producers.
Logistical Challenges in Sugar Production
Hurricane Helene, which made landfall in the Southeast US last week, has so far failed to significantly impact US sugar logistics. Trade sources indicated that Helene had less impact on the sugar industry than Francine did in Louisiana a few weeks ago.
The main impact on the sugar market was the disruption of rail and truck logistics. However, the US Sugar Savannah Refinery in Port Wentworth, Georgia, operated throughout the storm, even as logistics were affected.
The short-lived East Coast and Gulf port strike that began on October 1 had minimal impact on the sugar industry because bulk raw sugar shipments were less affected than containerized shipments.
Sugar Beets Strong Despite Warm Weather
The full sugar beet harvest, which typically begins around October 1, has been delayed in some areas due to warm weather. Temperatures have been above ideal levels in the Red River Valley and Michigan, while conditions have been extremely dry.
Warmer temperatures can be detrimental to beets piled outdoors, which is necessary once the full harvest begins. While the warm, dry conditions have delayed beet harvest in some areas, final sugar production was not expected to be negatively impacted, assuming beet pile deterioration can be avoided, as slicing of the large crop will run later into the spring for some processors.
Sugar beets in the four largest producing states were an aggregate 16% harvested as of September 29, up from 11% a week earlier and 14% at the same time last year, but behind the 18% average for the 2019-23 period, the USDA reported.
Source: USDA
The sugar cane crop in Louisiana was 6% harvested as of September 29 despite delays from Hurricane Francine. The cane harvest in Florida was about to get underway.
New Marketing Year Weighs on Pricing
The start of the new marketing year brought 2023-24 spot beet sugar prices down to lower 2024-25 levels, although some spot sugar continued to trade at higher prices. Beet sugar prices for 2024-25 were mostly steady to slightly firmer, with some processors noting they could sell sugar at the top of the price range.
At the same time, others reported it was hard to find buyers, as most processors have more sugar to sell than expected a few weeks ago. Most remaining buyers are small and mid-sized users who often pay higher prices than large buyers. Processors also tend to raise prices as they become well sold for the year ahead.
Bulk refined cane sugar prices, many of which are on a calendar year basis, were unchanged for both 2024 and 2025.
Also supportive to cash sugar prices were recent sharp gains in raw sugar futures, which rose about 25% from early September due to drought-reduced production forecasts for Brazil. Nearby raw prices pulled back somewhat this week.
Negotiations for 2025 annual corn sweetener contracts had yet to begin.
