Sugar dropped to an 18-month low in New York as a productive start to the season in Brazil, the world’s top exporter, is fueling bets that markets will remain well supplied this year.

Raw-sugar futures slipped as much as 3.8%. Prices touched the lowest since October 2022, before trimming losses. Brazil reported strong sugar cane crushing in the early stages of its new season, which kicked off in April. That’s supporting speculation over abundant supplies in the coming months. 

“A large output from Brazil’s Center-South region is expected through the peak of the season,” Murilo Aguiar, StoneX risk management consultant, said in a Thursday note. The seasonal peak for sugar cane crushing typically occurs in the months of July and August.

The top sugar cane region of the Center-South produced 84% more of the sweetener in the second half of April compared with a year earlier, industry group Unica said Wednesday. Favorable weather in Brazil is aiding field work, while the country’s cane acreage also seen increasing this year. 

“What is hitting the market is the fast pace of crush due to dry weather,” said Michael McDougall, managing director at Paragon Global Markets. Still, he believes the market has to watch for potential impacts of the drier weather in the development of the cane that will be harvested later in the year. 

In India, another major producer, the monsoon is expected to start slightly earlier this year, with a forecast for above-average rain raising the prospect for bigger harvests and the easing of export curbs on some crops.