Sugar Prices Gain on Short Covering as the Brazilian Real Rallies

Core Insights - Sugar prices have shown signs of recovery after early losses, driven by a stronger Brazilian real which has led to short covering in sugar futures [1] - Recent selloffs have pushed NY sugar prices to a 5-year low and London sugar prices to a 4.75-year low, primarily due to increased sugar production in Brazil and expectations of a global sugar surplus [2] Brazil Sugar Production - Brazil's sugar production for the 2025/26 season has been revised upwards to 45 million metric tons (MMT), an increase from the previous estimate of 44.5 MMT [3] - In the first half of October, Brazil's Center-South sugar output rose by 1.3% year-on-year to 2.484 million tons (MT), with the percentage of sugarcane crushed for sugar increasing to 48.24% from 47.33% the previous year [3] India Sugar Production - The India Sugar Mill Association (ISMA) has raised its 2025/26 sugar production estimate to 31 MMT, reflecting an 18.8% year-on-year increase [4] - India's favorable monsoon conditions have led to expectations of a bumper sugar crop, with cumulative monsoon rainfall reported at 937.2 mm, 8% above normal [5] - Projections indicate that India's sugar production could rise by 19% year-on-year to 34.9 MMT for the 2025/26 season, following a significant decline in the previous year [5]