Sugar Prices Supported by Dollar Weakness and Smaller Indian Sugar Exports

Core Insights - Sugar prices are experiencing upward movement due to a weaker dollar and recent developments in India's ethanol pricing policy, which may lead to reduced sugar supplies as mills shift focus to ethanol production [2][3] - The International Sugar Organization (ISO) has forecasted a significant sugar surplus of 1.625 million MT for the 2025-26 marketing year, driven by increased production in key countries [4] - Brazil's record sugar output is contributing to bearish price trends, with production estimates for 2025-26 raised to 45 million MT, indicating a strong supply outlook [6] Price Movements - March NY world sugar 11 is up +0.05 (+0.34%), while March London ICE white sugar 5 is up +2.00 (+0.47%) [1] - Sugar prices have been consolidating below recent one-month highs, influenced by external factors such as currency fluctuations and domestic policy changes in India [2] Supply Dynamics - India's food ministry's decision to allow mills to export 1.5 million MT of sugar in the 2025/26 season is a reduction from earlier estimates, indicating tighter domestic supplies [3] - The ISO's forecast of a +3.2% year-on-year increase in global sugar production to 181.8 million MT for 2025-26 suggests a shift in market dynamics [4] Market Sentiment - The outlook for robust global sugar supplies has negatively impacted sugar prices, with recent lows recorded in both London and NY markets [5] - Czarnikow's updated estimate of an 8.7 million MT global sugar surplus for 2025/26 reflects growing concerns over supply outpacing demand [5]