Sugar Prices Consolidate This Week's Gains

Core Insights - Sugar prices are stabilizing after recent gains, with March NY world sugar 11 down by 0.01 (-0.07%) and March London ICE white sugar 5 remaining unchanged [1] - Positive developments in India regarding ethanol pricing are influencing sugar supply dynamics, as mills may shift focus from sugar production to ethanol [2] - India's food ministry has allowed mills to export 1.5 million metric tons (MMT) of sugar for the 2025/26 season, a reduction from earlier estimates of 2 MMT, due to a quota system introduced after production issues [3] Supply and Demand Dynamics - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for 2025-26, contrasting with a deficit of 2.916 million MT in 2024-25, driven by increased production in India, Thailand, and Pakistan [4] - Global sugar production is expected to rise by 3.2% year-on-year to 181.8 million MT in 2025-26, contributing to bearish price trends [4] - Brazil's sugar production outlook is particularly bearish, with Conab raising its estimate for 2025/26 to 45 MMT, and recent data showing a 16.4% year-on-year increase in sugar output in the second half of October [6] Price Trends - The outlook for robust global sugar supplies has negatively impacted sugar prices, with London sugar reaching a 4.75-year low and NY sugar prices hitting a 5-year low [5] - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 MMT, indicating a growing supply situation [5] - The percentage of sugarcane crushed for sugar in Brazil has also increased, further contributing to the bearish price environment [6]