October NY world sugar #11 (SBV25) on Wednesday closed down -0.08 (-0.50%), and October London ICE white sugar #5 (SWV25) closed down -1.50 (-0.32%).
Sugar prices on Wednesday settled lower but remained above Tuesday’s 5-week lows. Signs of stronger sugar production in Brazil are undercutting sugar prices. Last Thursday, Unica reported Brazil’s Center-South sugar output in the first half of July rose +15% y/y to 3.4 MMT. Also, the amount of sugarcane being crushed for sugar by Brazil’s sugar mills has increased to 54% from 50% the same time last year.
The outlook for higher sugar exports from India is negative for prices after Bloomberg reported that India may permit local sugar mills to export sugar in the next season, which starts in October, as abundant monsoon rains may produce a bumper sugar crop. India’s Meteorological Department reported today that cumulative monsoon rain in India is at 500.8 mm, or 4% above normal as of August 4. Also, the Indian Sugar and Bio-energy Manufacturers Association said last Thursday that it will seek permission to export 2 MMT of sugar in 2025/26.
The outlook for higher sugar production in India, the world’s second-largest producer, is bearish for prices. On June 2, India’s National Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar production would climb +19% y/y to 35 MMT, citing larger planted cane acreage. That would follow a -17.5% y/y decline in India’s sugar production in 2024/25 to a 5-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).
Sugar prices have retreated over the past four months, with NY sugar falling to a 4.25-year low last month and London sugar sliding to a 4-year low, driven by expectations of a sugar surplus in the 2025/26 season. On June 30, commodities trader Czarnikow projected a 7.5 MMT global sugar surplus for the 2025/26 season, the largest surplus in 8 years. On May 22, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% y/y to a record 189.318 MMT, with global sugar ending stocks at 41.188 MMT, up 7.5% y/y.
Signs that the recent slide in sugar prices to 4-year lows has sparked a pickup in demand are positive for sugar prices. China’s June sugar imports soared by 1,435% to 420,000 MT. Also, Coca-Cola agreed to use cane sugar in Coke beverages sold in the US instead of high-fructose corn syrup, which could boost US sugar consumption by +4.4% to 11.5 MMT from 11 MMT currently, according to Bloomberg Intelligence.
