Sugar Prices Retreat Despite Brazil's Higher Output
Sugar prices initially surged on Tuesday, reaching a 1.75-month high, driven by signs of lower sugar content from Brazil's harvest. However, they later retreated, with March NY world sugar #11 closing down -0.18 (-1.07%).
Brazil's Center-South sugar output in the first half of September rose by +15.7% y/y to 3.622 MT. Meanwhile, the Thai Sugar Miller Corp projected Thailand's 2025/26 sugar crop to increase by +5% y/y to 10.5 MMT. India's National Federation of Cooperative Sugar Factories projected India's 2025/26 sugar production to climb +19% y/y to 34.9 MMT.
Despite these increases, the outlook for higher sugar exports from India is negative for sugar prices due to abundant monsoon rains. Sugar prices have been on a 7-month downtrend, with NY sugar sinking to a 4.25-year low and London sugar slumping to a 4-year low last month. Covrig Analytics projected a +4.1 MMT global sugar surplus for the 2025/26 season, contributing to the price retreat. Sucden asserted that India may divert 4 MMT of sugar to make ethanol in 2025/26, potentially leading to increased exports.
While initial signs pointed to a rise in sugar prices, recent projections and market conditions have led to a retreat. The global sugar surplus and potential sugar-to-ethanol diversion in India continue to influence the market, with sugar prices closing lower on Tuesday.
