Sugar Prices Continue to Fall Back From Tuesday’s 2-month High
NY sugar #11 futures (Oct) fell -0.14 (-0.84%) and London white sugar #5 futures (Oct) fell -7.50 (-1.53%) on long liquidation and surplus concerns. Forecasts of higher Indian, Thai, and global production (USDA: 189.3 MMT in 2025/26) weigh on prices, despite Brazil’s recent output declines and ISO’s 2024/25 deficit forecast.
October NY world sugar #11 (SBV25) today is down -0.14 (-0.84%), and October London ICE white sugar #5 (SWV25) is down -7.50 (-1.53%).
NY sugar prices today are seeing continued long liquidation pressure after the rally up to Tuesday’s 2-month high.
As a bullish factor, Unica today reported that Brazil’s Center-South sugar output in the second half of July fell by -0.8% y/y to 3,614 MT, and the 2025-26 crop output through July fell -7.8% y/y to 19,268 MT. The percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the second half of July increased to 54.10% from 50.32% the same time last year.
An excessive short position by funds could exacerbate any short-covering rally in sugar futures. Last Friday’s weekly Commitment of Traders (COT) report showed funds increased their net-short positions in NY sugar futures by +25,923 positions to 151,004 short positions in the week ending August 5, the most in almost 6 years.
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 Tuesday that cumulative monsoon rain in India was 500.8 mm as of August 4, or 4% above normal. 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 retreated through early July, with NY sugar falling to a 4.25-year low 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.
Sugar prices also have support from reduced sugar production in Brazil. Unica reported last Thursday that the cumulative 2025/26 Brazil Center-South sugar output through mid-July fell by -9.2% y/y to 15.655 MMT. Last month, Conab, Brazil’s government crop forecasting agency, said 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 production in Thailand is bearish for sugar prices. On May 2, Thailand’s Office of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar production rose +14% y/y to 10.00 MMT. Thailand is the world’s third-largest sugar producer and the second-largest exporter of sugar.
The International Sugar Organization (ISO) raised its 2024/25 global sugar deficit forecast to a 9-year high of -5.47 MMT on May 15, up from a February forecast of -4.88 MMT. This indicates a tightening market following the 2023/24 global sugar surplus of 1.31 MMT. ISO also cut its 2024/25 global sugar production forecast to 174.8 MMT from a February forecast of 175.5 MMT.
The USDA, in its bi-annual report released May 22, projected that global 2025/26 sugar production would climb +4.7% y/y to a record 189.318 MMT and that global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT. The USDA also forecasted that 2025/26 global sugar ending stocks would climb +7.5% y/y to 41.188 MMT. The USDA’s Foreign Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar production would rise +2.3% y/y to a record 44.7 MMT FAS predicted that India’s 2025/26 sugar production would rise +25% y/y to 35.3 MMT due to favorable monsoon rains and increased sugar acreage. FAS predicted that Thailand’s 2025/26 sugar production will climb +2% y/y to 10.3 MMT.
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Source : BarChart
