Sugar Prices Jump on Signs of Smaller Brazil Sugar Output

Core Viewpoint - Sugar prices have recently rallied to 5-week highs due to reduced production estimates in Brazil and potential changes in India's ethanol pricing policy, which may lead to lower sugar supplies [1][2]. Group 1: Price Movements - March NY world sugar 11 closed up +0.23 (+1.54%) and March London ICE white sugar 5 closed up +5.70 (+1.33%) [1]. - Sugar prices have been under pressure since early October due to expectations of robust global sugar supplies, with London sugar reaching a 4.75-year low and NY sugar hitting a 5-year low [5]. Group 2: Production Estimates - StoneX has cut its Brazil 2026/27 Center-South sugar production estimate to 41.5 million metric tons (MMT) from 42.1 MMT [1]. - Conab raised its Brazil 2025/26 sugar production estimate to 45 MMT from 44.5 MMT [6]. - ISO forecasts a +3.2% year-on-year rise in global sugar production to 181.8 million MMT in 2025-26, driven by increased production in India, Thailand, and Pakistan [4]. Group 3: Export Policies - India's food ministry is considering boosting the price of ethanol for gasoline blending, which could lead to more sugar mills diverting cane for ethanol production, thus reducing sugar supplies [2]. - India has allowed mills to export 1.5 MMT of sugar in the 2025/26 season, down from earlier estimates of 2 MMT [3]. Group 4: Market Surplus - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT in 2025-26, following a deficit of 2.916 million MT in 2024-25 [4]. - Czarnikow has increased its global 2025/26 sugar surplus estimate to 8.7 MMT, up from 7.5 MMT [5].