Sugar Prices Weighed Down by the Outlook for Ample Supplies

Core Insights - Sugar prices are experiencing downward pressure, with NY sugar reaching a 4.5-year low and London sugar hitting a 4.25-year low due to increased sugar production in Brazil and favorable weather conditions in India [1][2][4]. Group 1: Sugar Production and Supply - Brazil's Center-South sugar output in the second half of September increased by 10.8% year-on-year to 3.137 million tons [2] - Cumulative sugar output for the 2025-26 season in Brazil rose by 0.8% year-on-year to 33.524 million tons [2] - Datagro projects Brazil's Center-South sugar production for 2026/27 to rise by 3.9% year-on-year to a record 44 million tons [3] Group 2: Global Sugar Surplus - BMI Group forecasts a global sugar surplus of 10.5 million tons for the 2025/26 season [3] - Covrig Analytics projects a global sugar surplus of 4.1 million tons for the 2025/25 season [3] Group 3: India's Sugar Production and Export Outlook - India's sugar production for 2025/26 is projected to increase by 19% year-on-year to 34.9 million tons, following a decline of 17.5% year-on-year in 2024/25 to a five-year low of 26.2 million tons [4] - India's Meteorological Department reported cumulative monsoon rainfall of 937.2 mm as of September 30, which is 8% above normal, indicating a strong monsoon season [4] Group 4: Ethanol Diversion and Export Expectations - Sucden reported that India may divert 4 million tons of sugar for ethanol production in 2025/26, which may not sufficiently alleviate the sugar surplus and could lead to increased exports of up to 4 million tons [5]