The global sugar market has been trading sideways in the past three months, according to Rabobank’s Sugar Quarterly Q2 2014 report. Prices have reportedly been confined in a range between USc 16.5/lb and USc 18.5/lb.

Brazil has continued to send conflicting signals to the sugar market. Initial cane production estimates of 570 million tonnes and sugar estimates of 32.8 million tonnes remain in place for the region, but this is subject to revisions. Globally, production is expected to decrease slightly for the second year running; preliminary global production estimated for 2014/15 suggest a projected deficit of 0.9 million tonnes raw value.

“Despite a return to a global deficit for the first time in four years, the projected deficit is currently very modest, and is not enough to materially reduce the level of year-end global stocks”, stated Rabobank analyst Andy Duff. “Nor does it look sufficient to significantly impact the global stocks/consumption ratio. For this reason, our preliminary balance for 2014/15 suggests only limited additional support for prices from fundamentals as we move from the current international crop year to a new one.”