Possible Higher Sugar Exports From India Weighing on Sugar Prices

Core Insights - Sugar prices are declining due to concerns over increased sugar exports from India, with expectations of exports rising to 4 million metric tons (MMT) for the 2025/26 season, surpassing earlier estimates of 2 MMT [1][6] - The Brazilian real's strength is limiting sugar price losses, as it reached a 15-month high against the dollar, discouraging export sales from Brazil's sugar producers [2] - An excessive short position in New York sugar futures could lead to potential gains in a short-covering rally, with funds increasing their net-short positions by 32,849 contracts to 182,608, the highest in nearly six years [3] Sugar Production and Export Trends - New York sugar prices recently hit a 4.25-year low, while London sugar fell to a 3.5-week low, driven by expectations of higher sugar production in Brazil, which reported a 16% year-on-year increase in sugar output for the first half of August [4] - Brazil's sugar mills are prioritizing sugar production over ethanol, with a higher percentage of sugarcane being crushed for sugar, expected to continue as harvesting peaks [5] - Cumulative sugar output in Brazil's Center-South region for the 2025-26 season is down 4.7% year-on-year to 22.886 MMT as of mid-August [4]