October NY world sugar #11 (SBV25) on Tuesday closed down -0.22 (-1.34%), and October London ICE white sugar #5 (SWV25) closed down -11.10 (-2.21%).
Sugar prices settled sharply lower on Tuesday, with NY sugar posting a 4-week low. Sugar prices are under pressure due to the outlook for higher sugar production in Brazil. Last Friday, Unica reported that Brazil’s Center-South sugar output in the first half of August rose by +16% y/y to 3,615 MT. Also, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the first half of August increased to 55.00% from 49.15% the same time last year. However, cumulative 2025-26 Center-South sugar output through mid-August is down -4.7% y/y to 22.886 MMT.
Covrig Analytics recently reported that Brazil’s sugar mills are prioritizing sugar production over ethanol, crushing more cane for sugar. This trend is expected to continue as harvesting peaks, driven by drier cane crops that prompt mills to produce more sugar.
Sugar prices were also pressured Tuesday from weakness in the Brazilian real. The real (^USDBRL) fell to a 1.5-week low against the dollar on Tuesday, encouraging export sales form Brazil’s sugar producers.
Last Friday, London sugar rose to a 3.5-month high after the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficits. The ISO projects a global 2025/26 sugar deficit of -231,000 MT, improving from a -4.88 MMT shortfall in 2024/25. The ISO also projects 2025/26 global sugar production will rise by +3.3% y/y to 180.6 MMT, and 2025/26 global sugar consumption will increase +0.3% y/y to 180.8 MMT.
On August 19, Conab, Brazil’s government crop forecasting agency, cut its Brazil 2025/26 production estimate by 3.1% to 44.5 MMT from a previous estimate of 45.9 MMT. In July, Conab reported that 2024/25 Brazil sugar production fell by -3.4% y/y to 44.118 MMT, citing lower sugarcane yields due to drought and excessive heat.
The outlook for higher sugar exports from India is negative for sugar 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 was 767.1 mm as of September 2, or 7% above normal. Also, the Indian Sugar and Bio-energy Manufacturers Association recently said that it will seek permission to export 2 MMT of sugar in 2025/26.
