October NY World Sugar #11 (SBV25) closed -0.14 (-0.84%) on Wednesday, while October London Ice White Sugar #5 (SWV25) closed -5.30 (-1.12%).
Signs of Brazil’s global sugar production were under pressure on Wednesday after Brazil’s Ministry of Agriculture and livestock said it was total in total over the past 15 days.
Loss in sugar prices were limited on Wednesday after WTI crude oil (CLU25) prices rose to a five-week high.
The indication that the latest four years’ low sugar prices have caused a pick-up in demand is positive for sugar prices. China’s sugar imports in June range from 1,435% to 420,000 mt. President Trump also said last Wednesday that, according to Bloomberg Intelligence, he agreed to use sugar-de-sweetened coke drinks sold in the United States, excluding coke drinks sold in the United States, instead of high-fructose corn syrup.
The outlook for an increase in sugar production in Brazil is bearish for sugar prices. Dagagro said Monday that dry weather in Brazil encouraged sugar mills to increase cane grinding, and that more cane grind towards more profitable sugar production rather than ethanol. According to Covrig, Brazil’s sugar mill is expected to crush 54% of available canes in the first half of this month, adding perhaps 3.2 MMT of sugar to the market.
Sugar prices fell to a three-week low last Wednesday after Bloomberg reported that India could allow local sugar factories to export sugar next season. India’s Weather Service reported on Monday that India’s cumulative monsoon rains were 440.1 mm, or 8% above 8% as of July 27th.
The outlook for an increase in sugar production in India, the world’s second-largest producer, is bearish for prices. On June 2nd, the National Cooperative Sugar Factory Federation of India predicted that India’s sugar production would rise from +19% y/y to 35 mmt. According to the Sugar Mills Association of India (ISMA), this is the five-year low of 26.2 MMT following a -17.5% Y/Y drop in India’s sugar production in 2024/25. ISMA also reported on July 7 that India’s sugar production from October 1 to May 15 dropped to 25.74 mmt to -17% y/y.
For the past three months, sugar prices have withdrawn, with NY sugar dropping to a 4.25-year low earlier this month, and London sugar slipping to its lowest level in almost four years, in response to expectations of sugar surplus for the 2025/26 season. On June 30th, commodity trader Czarnikow predicted a global sugar surplus of 7.5 mmt towards the 2025/26 season, the largest surplus of eight years. On May 22, USDA predicted in its two reports that global 2025/26 sugar production would increase by +4.7% y/y to a record 189.318 mmt.
Sugar prices are also supported by the decline in sugar production in Brazil. Last Monday, Unica reported that the cumulative 2025/26 Brazil Center -South Sught Output had dropped to 12.249 mmt to -14.3% Y/Y by June. Last month, CONAB, Brazil’s government crop forecasting agency, said Brazil’s sugar production fell to -3.4% Y/Y to 44.118 MMT last month, with low sugarcane yields due to drought and excessive heat.
The outlook for an increase in sugar production in Thailand is bearish for sugar prices. On May 2, the Thai Cane and Sugar Committee office reported that Thailand’s sugar production increased 2024/25 sugar production in Thailand was 14% y/y to 10.00 mmt. Thailand is the third largest sugar producer in the world and the second largest exporter of sugar.
The International Sugar Organization (ISO) raised its global sugar shortage forecast for 2024/25 to a nine-year high of -5.47 MMT on May 15th, up from the February forecast of -4.88 MMT. This shows the tightening market after the global sugar surplus for 2023/24 followed by 1.31 mmt. The ISO also reduced its 2024/25 global sugar production forecast to 174.8 mmt from the February forecast of 175.5 mmt.
In its biennial report released on May 22, the USDA predicted that global 2025/26 sugar production would rise to +4.7% Y/y to record 189.318 MMT, and that global human sugar consumption would increase to +1.4% y/y to record 177.921 mmt. The USDA also predicted that the 2025/26 Global Sugar Ending Stock would rise from +7.5%y/y to 41.188 mmt. USDA’s Foreign Agricultural Services (FAS) predicted that Brazil’s 2025/26 sugar production would rise by +2.3% Y/y to a record 44.7 MMT FAS. FAS predicted that Thailand’s 2025/26 sugar production would rise from +2%y/y to 10.3 mmt.
On the date of publication, Rich Asplund had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published barchart.com
