(Bloomberg) -- A second year of bumper sugar production in Brazil is set to keep prices lower for longer, bringing relief to buyers that have struggled with years of shortages.

The world’s largest sugar exporter is on track for its second-biggest crop on record, in part due to good weather and a bigger area planted with cane, according to traders and analysts that gathered during New York Sugar Week. Millers are also turning a record amount of cane into sugar this year, at the expense of ethanol.

Rising exports out of Brazil in the coming months should ease supply concerns after consecutive deficits sent prices rising for five straight years, the longest winning streak since 1989. It will also provide relief at a time when large importing countries in Asia and the Middle East are still tight on inventory.

“Nobody thought Brazil could export that much,” said Marcelo de Andrade, managing director of soft commodities at Cofco International Ltd., noting that many traders were wrong in their previous forecasts.

The latest estimates discussed during this week’s meetings in New York all point to higher sugar production in Brazil than previously expected. The presenters at Sugar Week included Alvean Sugar SL, Louis Dreyfus Co. and Marex Group Plc. Brazil’s top cane-growing area of the Center South is expected to produce between 41 million and 42.5 million tons, near a record high.

Sugar cane plantings in Brazil are also higher than initially anticipated, with some traders pointing to an increase of 3% to 4% this year. That’s because more cane was left untouched in the fields last year, said Ricardo Carvalho, commercial director at BP Bunge Bioenergia SA.

“The forward look is nowhere near the sort of panicked conditions we had before,” said Tom McNeill, a director at consultancy Green Pool Commodity Specialists. 

It’s a turnaround from last fall, when sugar made new highs day after day as massive logjams at Brazilian ports prevented supplies from reaching consuming countries. Raw sugar futures in November traded at the highest in more than a decade.

Since then, futures have fallen about 30% as fears dissipated. Mild weather has allowed for both a good harvest as well as positive cane development into the new season. 

“Brazil is back in the game in a way we hadn’t seen for many years,” said Carlos Murilo Barros de Mello, head of the sugar desk for the Americas at risk management firm Hedgepoint Global Markets.

Even as it brings relief, the growing Brazilian crop also means increased market dependence on a single country, as second-largest grower India isn’t expected to export in a meaningful way for another year. 

The South Asian nation should only resume shipments significantly in the season starting in the second half of 2025, said Kiran Wadhwana, director of broker Comdex India Ltd. Until then, the world will rely mostly on Brazil, which he believes is a “huge risk” especially as most of the sugar gets shipped from a single port. 

The restrictions in India also mean global markets will be mostly balanced this year, with no excess of supplies. Consultancy Datagro expects a global surplus of only 1.6 million tons for the new crop year, which isn’t massive considering global inventories are at historically low levels. 

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