October NY world sugar #11 (SBV25) on Thursday closed up +0.33 (+2.03%), and October London ICE white sugar #5 (SWV25) closed up +8.80 (+1.87%).

Sugar costs rallied sharply on Thursday as a consequence of hypothesis that the latest slide in sugar costs to 4-year lows has sparked a pickup in demand.  China’s June sugar imports soared by 1,435% to 420,000 MT.  Additionally, President Trump final Wednesday stated Coca-Cola agreed to make use of cane sugar in Coke drinks offered within the US as an alternative of high-fructose corn syrup, which might enhance US sugar consumption by +4.4% to 11.5 MMT from 11 MMT at present, in keeping with Bloomberg Intelligence.

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On Wednesday, sugar costs fell to 3-week lows as a consequence of hypothesis that India could enhance its sugar exports.  Bloomberg reported Monday that the nation could allow native sugar mills to export sugar within the subsequent season, which begins in October, as considerable monsoon rains could produce a bumper sugar crop.  India’s Meteorological Division reported Monday that cumulative monsoon rain in India is 6% above regular as of July 21.

The outlook for increased sugar manufacturing in Brazil is bearish for sugar costs.  Datagro stated Monday that dry climate in Brazil has inspired the nation’s sugar mills to extend their cane crushing, diverting extra of the cane crush towards extra worthwhile sugar manufacturing fairly than ethanol.  In accordance with Covrig, Brazil’s sugar mills are anticipated to crush 54% of the accessible cane within the first half of this month, possible including 3.2 MMT of sugar into the market.  

The outlook for increased sugar manufacturing in India, the world’s second-largest producer, is bearish for costs.  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 35 MMT, citing bigger planted cane acreage.  That will observe a -17.5% y/y decline in India’s sugar manufacturing in 2024/25 to a 5-year low of 26.2 MMT, in keeping with the Indian Sugar Mills Affiliation (ISMA).  Additionally, the ISMA reported on July 7 that India’s sugar manufacturing throughout Oct 1-Could 15 fell -17% y/y to 25.74 MMT.

Sugar costs have retreated over the previous three months, with NY sugar falling to a 4.25-year low earlier this month and London sugar sliding to a virtually 4-year low, pushed by expectations of a sugar surplus within the 2025/26 season.  On June 30, commodities dealer Czarnikow projected a 7.5 MMT world 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 world 2025/26 sugar manufacturing would enhance by +4.7% y/y to a file 189.318 MMT, with world sugar ending shares at 41.188 MMT, up 7.5% y/y.

Sugar costs even have help from lowered sugar manufacturing in Brazil.  Unica reported final Monday that the cumulative 2025/26 Brazil Heart-South sugar output by June fell by -14.3% y/y to 12.249 MMT.  Final month, Conab, Brazil’s authorities crop forecasting company, stated 2024/25 Brazil sugar manufacturing fell by -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields as a consequence of drought and extreme warmth.

The outlook for increased 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 exporter of sugar.

The Worldwide Sugar Group (ISO) raised its 2024/25 world sugar deficit forecast to a 9-year excessive of -5.47 MMT on Could 15, up from a February forecast of -4.88 MMT.  This means a tightening market following the 2023/24 world sugar surplus of 1.31 MMT.  ISO additionally reduce its 2024/25 world sugar manufacturing forecast to 174.8 MMT from a February forecast of 175.5 MMT.  

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

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