October NY world sugar #11 (SBV25) on Friday closed down -0.28 (-1.69%), and October London ICE white sugar #5 (SWV25) closed down -9.20 (-1.92%).

Sugar costs retreated on Friday and have been below strain this week as a consequence of hypothesis that India might enhance its sugar exports.

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On Wednesday, sugar costs fell to 3-week lows after Bloomberg reported that India might allow native sugar mills to export sugar within the subsequent season, which begins in October, as plentiful monsoon rains might 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 greater 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 somewhat than ethanol.  In response to Covrig, Brazil’s sugar mills are anticipated to crush 54% of the out there cane within the first half of this month, seemingly including 3.2 MMT of sugar into the market.  

The outlook for greater 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 might 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 response to the Indian Sugar Mills Affiliation (ISMA).  Additionally, the ISMA reported on July 7 that India’s sugar manufacturing throughout Oct 1-Might 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 Might 22, the USDA, in its biannual report, projected that world 2025/26 sugar manufacturing would improve by +4.7% y/y to a document 189.318 MMT, with world sugar ending shares at 41.188 MMT, up 7.5% y/y.

Indicators that the latest slide in sugar costs to 4-year lows has sparked a pickup in demand are constructive for sugar costs.  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 bought within the US as a substitute of high-fructose corn syrup, which might enhance US sugar consumption by +4.4% to 11.5 MMT from 11 MMT presently, in response to Bloomberg Intelligence.

Sugar costs even have help from lowered sugar manufacturing in Brazil.  Unica reported final Monday that the cumulative 2025/26 Brazil Middle-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 greater sugar manufacturing in Thailand is bearish for sugar costs.  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 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 Might 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 lower 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 Might 22, projected that world 2025/26 sugar manufacturing would climb +4.7% y/y to a document 189.318 MMT and that world 2025/26 human sugar consumption would improve +1.4% y/y to a document 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 International Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a document 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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