– Sugar Prices Experience Significant Drop as Supply Concerns Diminish
– Monitoring Market Trends
– Sugar prices have sharply decreased, reflecting ongoing shifts in global supply dynamics.
– On October 13, 2025, March NY world sugar #11 (SBH26) closed down by 0.49 (-3.04%).
– December London ICE white sugar #5 (SWZ25) fell by 6.40 (-1.42%).
– This marks a continuation of a downward trend, with NY sugar hitting a three-week low and London sugar reaching its lowest point in 4.25 years for nearest futures.
– Supply Factors Influencing Prices
– Sugar prices have been facing pressure for seven months, with NY sugar hitting a 4.5-year low (SBV25) last month due to increased sugar output in Brazil.
– Reports from Unica indicate that Brazil’s Center-South sugar output surged by 15.7% year-on-year to 3.622 million tonnes during the first half of September.
– Notably, the proportion of sugarcane crushed for sugar by Brazilian mills climbed to 53.49%, up from 47.74% in the same period last year.
– However, cumulative sugar output through mid-September for the 2025-26 season fell by 0.1% year-over-year to 30.388 million tonnes.
– Global Supply Outlook
– The forecast for global sugar supplies contributes to the bearish price trend.
– BMI Group anticipates a global sugar surplus of 10.5 million tonnes for the 2025/26 period.
– Covrig Analytics similarly projects a surplus of 4.1 million tonnes for the 2025/25 season.
– Increased sugar exports from India further amplify the negative outlook as monsoon rains have led to a bountiful sugar crop.
– As of September 30, India’s Meteorological Department recorded monsoon rainfall at 937.2 mm, which is 8% above normal and represents the most vigorous monsoon in five years.
– Potential Production Changes in India
– The National Federation of Cooperative Sugar Factories has forecasted a 19% increase in India’s sugar production for the 2025/26 season, predicting totals of 34.9 million tonnes.
– This projection follows a significant decline of 17.5% the previous season, setting a five-year low at 26.2 million tonnes, as reported by the Indian Sugar Mills Association (ISMA).
– Another bearish development arose when the sugar trading firm Sucden suggested that India might divert 4 million tonnes of sugar for ethanol production in the 2025/26 period, potentially increasing exports to 4 million tonnes, surpassing earlier estimates of 2 million tonnes.
– Trends in Thailand’s Sugar Production
– Thailand’s sugar production forecast has equally turned bearish; the Thai Sugar Miller Corp project an increase of 5% year-on-year for the 2025/26 crop to 10.5 million tonnes.
– The Office of the Cane and Sugar Board reported a 14% increase from the previous year at 10.0 million tonnes for the 2024/25 season.
– As the world’s third-largest sugar producer and second-largest exporter, these trends in Thailand could further impact global market dynamics.
– Recent Market Activity
– A temporary uptick in prices was noticed on October 2, as NY sugar approached a one-and-three-quarter-month high, driven by indications of lower sugar content from Brazil’s sugar crush.
– Unica reported that the sugar content in Brazil’s Center-South sugarcane crushed in early September fell to 154.58 kg per ton, down from 160.07 kg per ton the previous year.
– On August 29, the International Sugar Organization (ISO) had predicted a global sugar deficit for the 2025/26 season, citing it as the sixth consecutive year of deficits.
– The ISO projects a shortfall of 231,000 tonnes, significantly improved from the previous year’s deficit of 4.88 million tonnes.
– Additionally, the USDA also forecasts a rise in global sugar production, estimating a 4.7% increase year-on-year to reach 189.318 million tonnes for the 2025/26 season.
– Conclusion: Navigating the Sugar Market Landscape
– Overall, the outlook for sugar prices appears bearish due to increased global production forecasts and ample supply from key producing countries like Brazil and India.
– As these dynamics unfold, keeping a close eye on production trends, rainfall patterns, and export levels will be crucial for stakeholders in the sugar market.
– Understanding these factors can provide valuable insights for anticipating future pricing movements and strategizing investments in the sugar market.