Sugar Costs Lengthen Promote-Off to Lowest Ranges in Extra Than 4 Years

March NY world sugar #11 (SBH26) is down -0.09 (-0.62%), and December London ICE white sugar #5 (SWZ25) is down -5.10 (-1.21%).

Sugar costs right now prolonged this month’s plunge, with NY sugar falling to a brand new 4.75-year nearest-futures low and London sugar falling to a brand new 4.25-year nearest-futures low.

Sugar costs have been beneath strain in current weeks, primarily because of increased sugar output in Brazil and speak of a worldwide sugar surplus.  Unica reported on October 16 that Brazil’s Middle-South sugar output within the second half of September rose by +10.8% y/y to three.137 MT.  Additionally, the proportion of sugarcane crushed for sugar by Brazil’s sugar mills within the second half of September elevated to 51.17% from 47.73% the identical time final 12 months.  As well as, cumulative 2025-26 Middle-South sugar output via September rose +0.8% y/y to 33.524 MMT.  Individually, advisor Datagro final Tuesday projected that Brazil’s Middle-South 2026/27 sugar manufacturing will climb +3.9% y/y to a report 44 MMT.

The outlook for sturdy world sugar provides is weighing on costs.  BMI Group on October 13 projected a worldwide 2025/26 sugar surplus of 10.5 MMT.  Covrig Analytics on October 7 projected a worldwide 2025/26 sugar surplus of 4.1 MMT.

The outlook for increased sugar exports from India is damaging for sugar costs, as plentiful monsoon rains might produce a bumper sugar crop.  On September 30, India’s Meteorological Division reported that cumulative monsoon rainfall as of that date was 937.2 mm, 8% above regular, marking the strongest monsoon in 5 years.  On June 2, India’s Nationwide Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar manufacturing would climb +19% y/y to 34.9 MMT, citing bigger planted cane acreage.  That might comply with a -17.5% y/y decline in India’s sugar manufacturing in 2024/25 to a 5-year low of 26.2 MMT, in response to the Indian Sugar Mills Affiliation (ISMA).

One other bearish issue for sugar was the current assertion from sugar dealer Sucden that India might divert solely 4 MMT of sugar to make ethanol in 2025/26, which isn’t sufficient to ease the nation’s sugar surplus and should immediate India’s sugar mills to export as a lot as 4 MMT of sugar, above earlier expectations of two MMT.  India is the world’s second-largest producer of sugar.

The outlook for increased sugar manufacturing in Thailand is bearish for costs.  The Thai Sugar Millers Corp on October 1 projected that Thailand’s 2025/26 sugar crop will improve by +5% y/y to 10.5 MMT.  On Might 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 exporter.

The Worldwide Sugar Group (ISO) forecasted a worldwide sugar deficit for the 2025/26 season on August 29, marking the sixth consecutive 12 months of deficits.  ISO initiatives a worldwide 2025/26 sugar deficit of -231,000 MT, down from the -4.88 MMT shortfall in 2024/25.  ISO additionally initiatives 2025/26 world sugar manufacturing will rise by +3.3% y/y to 180.6 MMT, and 2025/26 world sugar consumption will improve +0.3% y/y to 180.8 MMT.

The USDA, in its bi-annual report launched Might 22, projected that world 2025/26 sugar manufacturing would climb +4.7% y/y to a report 189.318 MMT and that world 2025/26 human sugar consumption would improve +1.4% y/y to a report 177.921 MMT.  The USDA additionally forecast that 2025/26 world sugar ending shares would climb by +7.5% y/y to 41.188 MMT.  The USDA’s International Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise by 2.3% y/y to a report 44.7 MMT.  FAS additionally predicted that India’s 2025/26 sugar manufacturing would improve by 25% y/y to 35.3 MMT, pushed by favorable monsoon rains and elevated sugar acreage.  As well as, FAS predicted that Thailand’s 2025/26 sugar manufacturing will improve by +2% y/y to 10.3 MMT.

On the date of publication, Wealthy Asplund didn’t have (both instantly or not directly) positions in any of the securities talked about on this article. All info and knowledge on this article is solely for informational functions. This text was initially printed on Barchart.com