July NY world sugar #11 (SBN25) immediately is down -0.09 (-0.54%), and August London ICE white sugar #5 (SWQ25) is up +1.20 (+0.26%).
Sugar costs immediately prolonged their two-month-long selloff, with NY sugar posting a virtually 4-year nearest-futures low and London sugar posting a 3-3/4 12 months low. Expectations for a worldwide sugar surplus are hammering costs. On Could 22, the USDA, in its biannual report, projected that international 2025/26 sugar manufacturing would enhance by +4.7% year-over-year (y/y) to a report 189.318 million metric tons (MMT), with a worldwide sugar surplus of 41.188 MMT, up 7.5% year-over-year.
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Nevertheless, sugar costs recovered from their worst ranges Thursday, with London sugar turning larger as a rally in WTI crude oil (CLN25) to a 1-1/2 month excessive sparked some brief masking in sugar futures. Increased crude costs profit ethanol costs, which can immediate the world’s sugar mills to divert extra cane crushing towards ethanol manufacturing reasonably than sugar, thus decreasing sugar provides.
The outlook for larger sugar manufacturing in India, the world’s second-largest producer, is bearish for costs. On Monday, India’s Nationwide Federation of Cooperative Sugar Factories projected India’s 2025/26 sugar manufacturing would climb +19% y/y to 35 MMT, citing bigger planted cane acreage. The outlook for plentiful rainfall in India might result in a bumper sugar crop, which is bearish for costs. On April 15, India’s Ministry of Earth Sciences projected an above-normal monsoon this 12 months, with complete rainfall forecast to be 105% of the long-term common. India’s monsoon season runs from June by September.
Indicators of bigger international sugar output are damaging for costs. On Could 22, the USDA’s Overseas Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a report 44.7 MMT. Additionally, India’s 2025/26 sugar manufacturing is projected to rise +25% y/y to 35.3 MMT, citing favorable monsoon rains and elevated sugar acreage. As well as, Thailand’s 2025/26 sugar manufacturing is anticipated to climb +2% y/y to 10.3 MMT.
In a bearish issue, the Indian authorities mentioned on January 20 that it might enable its sugar mills to export 1 MMT of sugar this season, easing the restrictions positioned on sugar exports in 2023. India has restricted sugar exports since October 2023 to take care of ample home provides. India allowed mills to export solely 6.1 MMT of sugar in the course of the 2022/23 season to September 30 after permitting exports of a report 11.1 MMT within the earlier season. Nevertheless, the ISMA tasks that India’s 2024/25 sugar manufacturing will fall -17.5% y/y to a 5-year low of 26.2 MMT. Additionally, the ISMA immediately reported that India’s sugar manufacturing from Oct 1-Could 15 was 25.74 MMT, down -17% from the identical interval final 12 months. As well as, Indian Meals Secretary Chopra mentioned on Could 1 that India’s 2024/25 sugar exports could solely complete 800,000 MT, under earlier expectations of 1 MMT.
The outlook for larger sugar manufacturing in Thailand is bearish for sugar costs. On Could 2, Thailand’s Workplace of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar manufacturing rose +14% y/y to 10.00 MMT. Thailand is the world’s third-largest sugar producer and the second-largest sugar exporter.
Supporting sugar costs is diminished sugar manufacturing in Brazil. Final Thursday, Unica reported that Brazil’s 2025/26 Middle-South sugar manufacturing for the primary half of Could fell -6.8% y/y to 2.408 MMT and that cumulative 2025/26 Brazil Middle-South sugar output by mid-Could is down by -22.7% y/y to three.989 MMT.
Indicators of decrease international sugar manufacturing are supportive of costs. On April 14, Unica reported that the cumulative 2024/25 Brazil Middle-South sugar output by March fell by 5.3% y/y to 40.169 MMT. On March 12, the Indian Sugar and Bio-energy Producers Affiliation lower its 2024/25 India sugar manufacturing forecast to 26.4 MMT from a January forecast of 27.27 MMT, citing decrease cane yields.
In the meantime, the Worldwide Sugar Group (ISO) on Could 15 raised its 2024/25 international sugar deficit forecast to a 9-year excessive of -5.47 MMT from a February forecast of -4.88 MMT, displaying a tightening market from the 2023/24 international sugar surplus of 1.31 MMT. The ISO additionally lower its 2024/25 international sugar manufacturing forecast to 174.8 MMT from a February forecast of 175.5 MMT.
Drought and extreme warmth final 12 months induced fires in Brazil that broken sugar crops in Brazil’s prime sugar-producing state of Sao Paulo. Inexperienced Pool Commodity Specialists famous that as a lot as 5 MMT of sugar cane could have been misplaced as a result of fires. Final month, Conab, Brazil’s authorities crop forecasting company, projected 2024/25 Brazil sugar manufacturing to fall -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields because of drought and extreme warmth.
The USDA, in its bi-annual report launched Could 22, projected that international 2025/26 sugar manufacturing would climb +4.7% y/y to a report 189.318 MMT and that international 2025/26 human sugar consumption would enhance +1.4% y/y to a report 177.921 MMT. The USDA additionally forecasted that 2025/26 international sugar ending shares would climb +7.5% y/y to 41.188 MMT.
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