Sugar Prices Plunge as Conab Boosts Its Brazil Sugar Production Estimate

Core Insights - Sugar prices are experiencing a significant decline, with NY world sugar 11 down by 3.00% and December London ICE white sugar 5 down by 2.17%, just above last week's lows [1] - Brazil's crop forecasting agency, Conab, has increased its sugar production estimate for Brazil in 2025/26 to 45 million metric tons (MMT) from a previous estimate of 44.5 MMT, contributing to the downward pressure on prices [1] Group 1: Brazil's Sugar Production - Brazil's Center-South sugar output in the first half of October rose by 1.3% year-on-year to 2.484 million tons (MT) [3] - The percentage of sugarcane crushed for sugar by Brazil's sugar mills increased to 48.24% from 47.33% year-on-year [3] - Cumulative sugar output in Brazil's Center-South through mid-October for 2025-26 rose by 0.9% year-on-year to 36.016 MMT [3] Group 2: Global Sugar Supply and Demand - Datagro projected Brazil's Center-South sugar production for 2026/27 to increase by 3.9% year-on-year to a record 44 MMT [2] - BMI Group projected a global sugar surplus of 10.5 MMT for 2025/26, while Covrig Analytics projected a surplus of 4.1 MMT for the same period [2] Group 3: India's Sugar Production Outlook - India's sugar production is expected to rise by 19% year-on-year to 34.9 MMT in 2025/26, following a significant decline of 17.5% year-on-year to 26.2 MMT in 2024/25 [4] - The Indian Meteorological Department reported cumulative monsoon rainfall of 937.2 mm, which is 8% above normal, indicating a strong monsoon that may lead to a bumper sugar crop [4] Group 4: Sugar Export Dynamics - India's sugar mills may export as much as 4 MMT of sugar in 2025/26, exceeding earlier expectations of 2 MMT, due to a projected surplus [5] - Sucden, a sugar trader, indicated that India may divert only 4 MMT of sugar for ethanol production, which is insufficient to alleviate the surplus [5]