Sharply reduced Thai production combined with record Brazilian production was bound to push Brazilian exports into record territory. Brazil shipped a record 4.2 mil tones of raw sugar in October vs 1.9 mil last year. Demand has far exceeded previous expectations, led by China. Hence, Brazilian sugar is anticipated to be in deficit, unless Indian export policies are large enough and soon enough to shift trade-flow estimates toward a minor deficit, or surplus.
Fundamental bulls expect a resumption of upward price movement. They are aware of a possible headline price drop if a more accommodating Indian export policy is announced during Nov or early Dec. In the end, unless India announces an aggressive export subsidy, any break in prices seems likely to find progressive buying interest on scale from both fundamental traders and macro investors, the latter of which continue to expect a weaker dollar into 2021 combined with stimulus, economic recovery, higher energy prices and inflation.