Sugar Prices Supported by Lower Brazil Sugarcane Yields

Core Insights - Sugar prices exhibited mixed performance, with NY sugar closing up by 0.07 (+0.431%) and London sugar down by 1.20 (-0.26%) on Friday, influenced by varying production signals from Brazil and global demand trends [1] Group 1: Production Trends - Brazil's Center-South sugarcane crush saw a decline in sugar content, dropping to 154.58 kg/ton in early September from 160.07 kg/ton a year earlier, indicating potential lower sugar production [1] - Brazil's sugar output in the first half of September increased by 15.7% year-on-year to 3.622 million tons, with a higher percentage of sugarcane crushed for sugar rising to 53.49% compared to 47.74% the previous year [4] - India's sugar production is projected to rise by 19% year-on-year to 34.9 million tons for the 2025/26 season, following a significant decline in the previous year [6] Group 2: Global Demand and Supply Dynamics - NY sugar reached a 1.5-month high and London sugar a 2-week high due to stronger global demand, highlighted by Pakistan's order of 320,000 metric tons of sugar for immediate delivery [2] - A global sugar surplus of 2.8 million tons is projected for the 2025/26 season, a shift from a deficit of 4.7 million tons in the 2024/25 season, indicating an overall increase in supply [3] - The outlook for higher sugar exports from India is negative for sugar prices, as the country experiences its strongest monsoon in five years, leading to expectations of a bumper sugar crop [5]