October NY world sugar #11 (SBV25) on Monday closed down -0.45 (-2.68%), and October London ICE white sugar #5 (SWV25) closed down -13.50 (-2.77%).

Sugar costs settled sharply decrease Monday on the outlook for increased sugar manufacturing in Brazil.  Datagro mentioned 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 relatively than ethanol.  In line with Covrig, Brazil’s sugar mills are anticipated to crush 54% of the out there cane within the first half of this month, possible including 3.2 MMT of sugar into the market.  

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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 biggest 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 report 189.318 MMT, with world sugar ending shares at 41.188 MMT, up 7.5% y/y.

Final Friday, NY sugar posted a 1.5-month excessive and London sugar posted a 1.75-month excessive, pushed by indicators of stronger world sugar demand.  China’s June sugar imports soared by 1,435% to 420,000 MT.  Additionally, President Trump final Wednesday mentioned Coca-Cola agreed to make use of cane sugar in Coke drinks bought 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 presently, in line with Bloomberg Intelligence.

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

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 may 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 line 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 manufacturing in India is anticipated to profit from forecasts for above-normal rains throughout the monsoon season (June-Sep).  Final Monday, the India Meteorological Division reported that India’s rainfall in June was 9% above regular and forecasted above-normal rain for July.

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 report 189.318 MMT and that world 2025/26 human sugar consumption would enhance +1.4% y/y to a report 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 report 44.7 MMT  FAS predicted that India’s 2025/26 sugar manufacturing would rise +25% y/y to 35.3 MMT as a result 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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