Could NY world sugar #11 (SBK25) on Thursday closed up +0.07 (+0.39%), and August London ICE white sugar #5 (SWQ25) closed up +1.60 (+0.32%).

On Thursday’s information of diminished sugar output in India, sugar costs posted reasonable beneficial properties.  The Indian Sugar and Bio-Vitality Producers Affiliation (ISMA) reported as we speak that India’s sugar manufacturing from Oct 1-Apr 15 was 25.5 MMT, down -18% from the identical interval final yr.

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Additionally, Thursday’s sharp +3% rally in WTI crude oil (CLK25) to a 1-1/2 week excessive is bullish for sugar costs.  Energy in crude oil advantages ethanol costs, which can immediate the world’s sugar mills to divert extra cane crushing to ethanol manufacturing fairly than sugar, thus curbing sugar provides.  

Sugar costs have been on the defensive this week, with NY sugar posting a 2-1/2 yr nearest-futures low Tuesday and London sugar posting a 2-3/4 month low Wednesday.  The outlook for plentiful rain in India that results in a bumper sugar crop is undercutting sugar costs.  On Tuesday, India’s Ministry of Earth Sciences projected an above-normal monsoon this yr, with whole rainfall forecast to be 105% of the long-term common.  India’s monsoon season runs from June by way of September.  

Additionally, weighing on sugar costs is a priority that the worldwide commerce struggle will undercut world financial progress and that tariffs will increase sugar costs for shoppers, curbing demand.

Additionally, on the destructive aspect, marketing consultant Datagro on March 12 projected that 2025/26 Brazil Middle-South sugar manufacturing would climb +6% y/y to 42.4 MMT.  As well as, Inexperienced Pool Commodity Specialists on February 5 projected that the worldwide sugar market will shift to a surplus of +2.7 MMT within the 2025/26 crop yr from its estimate of a deficit of -3.7 MMT in 2024/25.

In a bearish issue, the Indian authorities mentioned on January 20 that it might permit 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 take care of ample home provides.  India allowed mills to export solely 6.1 MMT of sugar in the course of the 2022/23 season to September 30 after permitting exports of a document 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 26.4 MMT.

The outlook for increased sugar manufacturing in Thailand is bearish for sugar costs.  On October 29, Thailand’s Workplace of the Cane and Sugar Board projected that Thailand’s 2024/25 sugar manufacturing would leap by +18% y/y to 10.35 MMT.  Thailand produced 8.77 MMT of sugar within the 2023/24 season that resulted in April.  Thailand is the world’s third-largest sugar producer and the second-largest sugar exporter.

Indicators of decrease international sugar manufacturing are supportive of costs.  Unica reported Monday that the cumulative 2024/25 Brazil Middle-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 March 6 raised its 2024/25 international sugar deficit forecast to -4.88 MMT from a November forecast of -2.51 MMT, exhibiting a tightening market from the 2023/24 international sugar surplus of 1.31 MMT.  The ISO additionally reduce its 2024/25 international sugar manufacturing forecast to 175.5 MMT from a November forecast of 179.1 MMT.  

Drought and extreme warmth final yr brought on fires in Brazil that broken sugar crops in Brazil’s high 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 as a result of fires.  On Thursday, 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 on account of drought and extreme warmth.  

The USDA, in its bi-annual report launched November 21, projected that international 2024/25 sugar manufacturing would climb +1.5% y/y to a document 186.619 MMT and that international 2024/25 human sugar consumption would enhance +1.2% y/y to a document 179.63 MMT.  The USDA additionally forecasted that 2024/25 international sugar ending shares would decline -6.1% y/y to 45.427 MMT. 

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