Sugar Prices Supported by the Prospects of Smaller Sugar Exports From India

Core Viewpoint - Sugar prices are experiencing moderate gains due to supply concerns stemming from India's potential increase in ethanol prices, which may lead to reduced sugar production as mills shift focus to ethanol [2] Group 1: Price Movements - March NY world sugar 11 is up by 0.14 (+0.95%), while March London ICE white sugar 5 is up by 2.50 (+0.59%) [1] - Sugar prices have been consolidating below the one-month highs reached last Wednesday [2] Group 2: Supply Dynamics - India's food ministry is considering boosting the price of ethanol, which could incentivize sugar mills to divert more cane to ethanol production, thereby reducing sugar supplies [2] - On November 14, India's food ministry announced that mills would be allowed to export 1.5 million metric tons (MMT) of sugar in the 2025/26 season, lower than the previous estimate of 2 MMT [3] Group 3: Global Production Forecasts - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for 2025-26, following a deficit of 2.916 million MT in 2024-25, driven by increased production in India, Thailand, and Pakistan [4] - ISO projects a 3.2% year-on-year increase in global sugar production to 181.8 million MT in 2025-26 [4] Group 4: Market Sentiment - The outlook for robust global sugar supplies has negatively impacted sugar prices, with London sugar reaching a 4.75-year low and NY sugar hitting a 5-year low due to higher output in Brazil and expectations of a global surplus [5] - Czarnikow has raised its global sugar surplus estimate for 2025/26 to 8.7 MMT, an increase of 1.2 MMT from the previous estimate [5] Group 5: Brazil's Production Impact - Brazil's crop forecasting agency, Conab, has increased its sugar production estimate for 2025/26 to 45 MMT from 44.5 MMT [6] - Brazil's Center-South sugar output rose by 16.4% year-on-year to 2.068 MT in the second half of October, with the percentage of sugarcane crushed for sugar increasing to 46.02% [6] - Cumulative sugar output in Brazil's Center-South through October rose by 1.6% year-on-year to 38.085 MMT [6]