Sugar Prices Edge Higher as Brazil Cuts Production Forecast

Sugar futures gained on Wednesday as a lower production forecast from Brazil supported prices, though long-term oversupply risks remain.

Brazil Output Cuts Lift Prices

• October NY world sugar #11 (SBV25) rose 0.37%, and October London white sugar #5 (SWV25) added 0.06%.
• Brazil’s crop agency Conab lowered its 2025/26 sugar production forecast by 3.1% to 44.5 MMT, down from 45.9 MMT.
• Recent data also showed Center-South sugar output fell 0.8% year-on-year in late July, while cumulative production through July dropped 7.8% y/y.
• Mills continue to crush more cane for sugar rather than ethanol, with 54.1% allocated to sugar versus 50.3% last year.

Strong Demand Supports Prices

• China’s sugar imports surged 76% in July to 740,000 MT.
• Pakistan has tendered for 200,000 MT of refined sugar, adding to demand signals.

India’s Bumper Crop Poses Bearish Risk

• India, the world’s second-largest sugar producer, could boost global supply next season.
• The National Federation of Cooperative Sugar Factories projects 2025/26 sugar output at 35 MMT, up 19% year-on-year.
• The Indian Sugar and Bio-Energy Manufacturers Association is seeking approval to export 2 MMT of sugar in 2025/26.
• This follows a sharp 17.5% decline in 2024/25 output to a five-year low of 26.2 MMT.

Thailand and Global Supply Outlook

• Thailand’s 2024/25 sugar output rose 14% y/y to 10 MMT.
• The USDA expects global sugar production in 2025/26 to rise 4.7% y/y to 189.3 MMT, with consumption at a record 177.9 MMT.
• Global ending stocks are forecast to climb 7.5% to 41.2 MMT, signaling oversupply.

Market Balance: Deficit Near-Term, Surplus Ahead

• The International Sugar Organization (ISO) raised its 2024/25 global deficit forecast to -5.47 MMT, the largest in nine years.
• But forward outlooks point to a surplus: Czarnikow projects a 7.5 MMT global surplus in 2025/26, the biggest in eight years.
• USDA forecasts also point to record crops in Brazil and India, adding to bearish pressure.

Sugar Price Forecast

In the short term, prices may stay supported by Brazil’s weaker yields and stronger Asian demand. But the long-term forecast leans bearish as India, Brazil, and Thailand ramp up output, potentially pushing sugar prices back toward multi-year lows.

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