Sugar Prices Sink as Global Supplies Build

Core Viewpoint - Sugar prices are experiencing a significant decline due to increased production in Brazil, leading to oversupply and lower market prices [2][4]. Group 1: Sugar Price Trends - October NY world sugar 11 closed down -0.16 (-1.03%), while December London ICE white sugar 5 closed down -4.50 (-0.98%) [1]. - Sugar prices have reached a 4.25-year low for NY sugar and a 4-year low for London sugar [2]. - The downtrend in sugar prices has persisted for six months, primarily driven by expectations of higher production in Brazil [4]. Group 2: Production Insights - Brazil's Center-South sugar output in the second half of August increased by +18% year-on-year to 3.872 million tons [2]. - The percentage of sugarcane crushed for sugar by Brazil's sugar mills rose to 54.20% from 48.78% year-on-year [2]. - Cumulative sugar output in Brazil for the 2025-26 season through August fell -1.9% year-on-year to 26.758 million tons [2]. Group 3: Global Market Dynamics - India is expected to divert 4 million tons of sugar for ethanol production in 2025/26, which may lead to increased exports of sugar from Indian mills [3]. - The International Sugar Organization (ISO) forecasts a global sugar deficit of -231,000 tons for the 2025/26 season, marking the sixth consecutive year of deficits [6]. - Global sugar production is projected to rise by +3.3% year-on-year to 180.6 million tons for the 2025/26 season, while consumption is expected to increase by +0.3% year-on-year to 180.8 million tons [6]. Group 4: Market Positioning - Funds have significantly increased their net-short positions in NY sugar futures, reaching 182,608 contracts, the highest in nearly six years [5].