Brazil produced more of the sweetener than expected in the 2nd half of May. The industry group Unica announced the statement that Brazil's sugar production and export went beyond expectation, thus creating a supply-demand imbalance that drove the price down. While drought in the country decreased the raw total output of sugar cane crops, the adequate sunlight boosted its sugar content, resulting in an increase in sugar production in the short run.
In the long run, however, the bank still expects Brazilian output to fall below last year as the overall weather conditions are worsened compared to the previous cycle. The sugar cash contract price is tanking as supply exceeds demand, falling to 16.767, a significant decrease from its May performance at over 18.3. With the supply-demand imbalance still in effect, the price might keep going low.
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