Sugar Prices Fall on the Outlook for Ample Global Supplies

July NY world sugar #11 (SBN25) Friday closed down -0.15 (-0.85%), and August London ICE white sugar #5 (SWQ25) closed down -2.90 (-0.59%).

Sugar costs on Friday tumbled to 1-week lows on expectations for a world sugar surplus.  On Wednesday, advisor Datagro projected a 2025/26 world sugar surplus of +1.53 MMT, recovering sharply from a 2024/25 world sugar deficit of -4.67 MMT.  In the meantime, StoneX initiatives a 2025/26 world sugar surplus of +3.74 MMT.

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Indicators of bigger world sugar output are adverse for costs.  Final Tuesday, the USDA’s Overseas Agricultural Service (FAS) predicted that India’s 2025/26 sugar manufacturing would rise +26% y/y to 35 MMT, citing favorable monsoon rains and elevated sugar acreage.  On April 23, the USDA’s FAS predicted that Brazil’s 2025/26 sugar manufacturing would climb +2.3% y/y to 44.7 MMT from 43.7 MMT within the earlier season.  On April 29, Conab forecasted Brazil’s 2025/26 Brazil sugar manufacturing would climb +4.0% y/y to 45.875 MMT.  

Sugar costs are additionally being undercut by the outlook for ample rain in India, which may result in a bumper sugar crop.  On April 15, India’s Ministry of Earth Sciences projected an above-normal monsoon this 12 months, with whole rainfall forecast to be 105% of the long-term common.  India’s monsoon season runs from June by way of September.  

In a bearish issue, the Indian authorities stated 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 keep up satisfactory home provides.  India allowed mills to export solely 6.1 MMT of sugar throughout the 2022/23 season to September 30 after permitting exports of a report 11.1 MMT within the earlier season.  Nevertheless, the ISMA initiatives 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 stated on Could 1 that India’s 2024/25 sugar exports could solely whole 800,000 MT, under earlier expectations of 1 MMT.

The outlook for greater 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.

Indicators of decrease world sugar manufacturing are supportive of costs.  On Tuesday, Unica reported that Brazil 2025/26 Heart-South sugar manufacturing for April fell -38.6% y/y to 1.58 MMT.  Unica reported on April 14 that the cumulative 2024/25 Brazil Heart-South sugar output by way of March fell by 5.3% y/y to 40.169 MMT.  On March 12,  the Indian Sugar and Bio-energy Producers Affiliation reduce 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 Thursday raised its 2024/25 world sugar deficit forecast to a 9-year excessive of -5.47 MMT from a February forecast of -4.88 MMT, exhibiting a tightening market from the 2023/24 world sugar surplus of 1.31 MMT.  The ISO additionally reduce its 2024/25 world sugar manufacturing forecast to 174.8 MMT from a February forecast of 175.5 MMT.  

Drought and extreme warmth final 12 months brought on 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 because of the 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 November 21, projected that world 2024/25 sugar manufacturing would climb +1.5% y/y to a report 186.619 MMT and that world 2024/25 human sugar consumption would improve +1.2% y/y to a report 179.63 MMT.  The USDA additionally forecasted that 2024/25 world sugar ending shares would decline -6.1% y/y to 45.427 MMT. 

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