October NY world sugar #11 (SBV25) on Tuesday closed up +0.21 (+1.34%), and October London ICE white sugar #5 (SWV25) closed up +3.60 (+0.75%).
Sugar costs settled greater Tuesday after an almost +1% rally in WTI crude oil (CLV25) sparked quick masking in sugar futures. Stronger crude costs profit ethanol costs and will immediate international sugar mills to divert extra cane crushing towards ethanol manufacturing slightly than sugar, thus decreasing sugar provides.
On Monday, NY sugar tumbled to a 4.25-year nearest-futures low, and London sugar fell to a 2.5-week low as a result of outlook for greater sugar manufacturing in Brazil. On August 29, Unica reported that Brazil’s Middle-South sugar output within the first half of August rose by +16% y/y to three,615 MT. Additionally, the share of sugarcane crushed for sugar by Brazil’s sugar mills within the first half of August elevated to 55.00% from 49.15% the identical time final yr. Nonetheless, cumulative 2025-26 Middle-South sugar output by mid-August is down -4.7% y/y to 22.886 MMT.
Covrig Analytics lately reported that Brazil’s sugar mills are prioritizing sugar manufacturing over ethanol, crushing extra cane for sugar. This development is predicted to proceed as harvesting peaks, pushed by drier cane crops that immediate mills to provide extra sugar.
On August 9, London sugar rose to a 3.75-month excessive after the Worldwide Sugar Group (ISO) forecast a worldwide sugar deficit for the 2025/26 season, the sixth consecutive yr of sugar deficits. The ISO tasks a worldwide 2025/26 sugar deficit of -231,000 MT, bettering from a -4.88 MMT shortfall in 2024/25. The ISO additionally tasks 2025/26 international sugar manufacturing will rise by +3.3% y/y to 180.6 MMT, and 2025/26 international sugar consumption will enhance +0.3% y/y to 180.8 MMT.
On August 19, Conab, Brazil’s authorities crop forecasting company, minimize its Brazil 2025/26 manufacturing estimate by 3.1% to 44.5 MMT from a earlier estimate of 45.9 MMT. In July, Conab reported that 2024/25 Brazil sugar manufacturing fell by -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields as a result of drought and extreme warmth.
Expectations for plentiful sugar provides are undercutting sugar costs. On June 30, commodities dealer Czarnikow projected a 7.5 MMT international sugar surplus for the 2025/26 season, the most important surplus in 8 years. On Could 22, the USDA, in its biannual report, projected that international 2025/26 sugar manufacturing would enhance by +4.7% y/y to a report 189.318 MMT, with international sugar ending shares at 41.188 MMT, up 7.5% y/y.
