Sugar Prices Supported by Brazilian Real Strength

Core Insights - Sugar prices are experiencing mixed trends, with NY sugar reaching a 5-week high while London sugar is slightly down, influenced by the strength of the Brazilian real against the dollar [1] Group 1: Market Dynamics - The Brazilian real's rise to a 1-week high is supporting sugar prices by discouraging export sales from Brazil's producers [1] - StoneX has revised its Brazil 2026/27 Center-South sugar production estimate down to 41.5 million metric tons (MMT) from 42.1 MMT, providing carryover support for sugar prices [2] - India's food ministry is considering increasing the price of ethanol for gasoline blending, which could lead to a reduction in sugar supplies as mills may divert more cane to ethanol production [2][3] Group 2: Supply and Demand Forecasts - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million metric tons for 2025-26, driven by increased production in India, Thailand, and Pakistan, contrasting with a previous deficit forecast [4] - Global sugar production is expected to rise by 3.2% year-on-year to 181.8 million metric tons in 2025-26 [4] - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 million metric tons, reflecting a significant increase from the previous estimate of 7.5 million metric tons [5] Group 3: Production Trends - Brazil's crop forecasting agency, Conab, has raised its sugar production estimate for 2025/26 to 45 MMT, indicating a bullish outlook for sugar output [6] - Brazil's Center-South sugar output in the second half of October increased by 16.4% year-on-year to 2.068 MMT, with a higher percentage of sugarcane being crushed for sugar [6]