Sugar Prices Climb on Signs of Stronger Global Sugar Demand

Core Insights - Sugar prices are experiencing a slight increase due to signs of stronger demand, with Pakistan booking 320,000 MT for delivery next month [1] - However, the overall market sentiment remains bearish due to expectations of abundant global supplies, leading to significant price declines in recent months [2][6] Supply and Demand Dynamics - The global sugar market is projected to have a surplus of +2.8 MMT for the 2025/26 season, a shift from a deficit of -4.7 MMT in the 2024/25 season [2] - Brazil's sugar output has increased by +18% year-on-year in the second half of August, contributing to the bearish outlook [3] - India's potential diversion of 4 MMT of sugar for ethanol production may not alleviate the surplus, prompting increased exports [4] Production Forecasts - The International Sugar Organization (ISO) forecasts a global sugar deficit of -231,000 MT for the 2025/26 season, improving from a -4.88 MMT shortfall in 2024/25 [5] - Global sugar production is expected to rise by +3.3% year-on-year to 180.6 MMT for the 2025/26 season, while consumption is projected to increase by +0.3% to 180.8 MMT [5] - The USDA anticipates a record global sugar production of +4.7% year-on-year to 189.318 MMT for the 2025/26 season, with ending stocks rising by 7.5% to 41.188 MMT [6]