Sugar Prices Climb as Brazil Cane Yields Decline
Yahoo Finance·2025-10-02 16:24

Price Movements - March NY world sugar 11 (SBH26) increased by +0.22 (+1.36%) and December London ICE white sugar 5 (SWZ25) rose by +5.10 (+1.13%) [1] Supply and Production Concerns - Sugar prices are rising due to concerns over lower sugarcane yields in Brazil, with Unica reporting a +6.9% year-on-year increase in Brazil's Center South sugarcane crush to 46 million metric tons (MMT) in the first half of September. However, the sugar content in the cane decreased to 154.58 kg/ton from 160.07 kg/ton a year earlier, indicating lower sugar production [2] - Brazil's Center-South sugar output in the first half of September rose by +15.7% year-on-year to 3.622 MMT, with the percentage of sugarcane crushed for sugar increasing to 53.49% from 47.74% the previous year. However, cumulative sugar output for the 2025-26 season through mid-September fell by -0.1% year-on-year to 30.388 MMT [5] Global Demand and Export Outlook - NY sugar reached a 1.5-month nearest-futures high, while London sugar climbed to a 1.5-week high due to stronger global demand, highlighted by Pakistan's order of 320,000 MT of sugar for immediate delivery [3] - The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains have led to expectations of a bumper sugar crop. The cumulative monsoon rain in India as of September 30 was reported at 937.2 mm, which is 8% above normal and the strongest in five years [6] - India's National Federation of Cooperative Sugar Factories projected a +19% year-on-year increase in sugar production for the 2025/26 season to 34.9 MMT, following a -17.5% year-on-year decline in 2024/25 to a five-year low of 26.2 MMT [7] Market Trends - Last Tuesday, NY sugar hit a 4.25-year nearest-futures low, and London sugar reached a 4-year low, extending a seven-month downtrend due to expectations of abundant global sugar supplies. StoneX projected a global sugar surplus of +2.8 MMT for the 2025/26 season, a shift from a deficit of -4.7 MMT in the 2024/25 season [4]