Projections of Smaller EU Sugar Acreage Boosts Sugar Prices

Sugar Market Overview - Sugar prices experienced an increase, with March NY world sugar 11 closing up by 1.49% and March London ICE white sugar 5 up by 1.97% on Tuesday [1] - The European Union is expected to see a 10% reduction in sugar acreage for the 2026-27 season, following a similar 10% drop in sugar beet acreage for the 2025-26 season [1] Indian Sugar Production - Indian sugar production surged by 43% year-on-year to 4.11 million metric tons (MMT) from October to November, with 428 sugar mills currently crushing cane, an increase from 376 mills a year ago [2] - The Indian food ministry's consideration to raise ethanol prices for gasoline blending could lead to more cane being diverted to ethanol production, potentially reducing sugar supplies [4] Brazilian Sugar Production - Brazil's sugar production forecast for the 2025/26 season was raised to 45 MMT, up from a previous estimate of 44.5 MMT, indicating a bearish outlook for sugar prices [3] - In the first half of November, Brazil's Center-South sugar output increased by 8.7% year-on-year to 983 thousand metric tons (MT), with cumulative output through mid-November rising by 2.1% year-on-year to 39.179 MMT [3] Global Sugar Supply and Demand - The International Sugar Organization (ISO) projected a sugar surplus of 1.625 million MT for the 2025-26 season, reversing a deficit of 2.916 million MT in 2024-25, driven by increased production in India, Thailand, and Pakistan [6] - ISO forecasts a 3.2% year-on-year increase in global sugar production to 181.8 million MT for the 2025-26 marketing year [6] Export Regulations - India's food ministry announced a reduction in the sugar export quota for the 2025/26 season to 1.5 MMT, down from earlier estimates of 2 MMT, following a quota system introduced in the 2022/23 season due to reduced production [5]