Sugar Prices Rebound as Dollar Weakness Sparks Short Covering

Core Viewpoint - Sugar prices are experiencing fluctuations due to varying production levels in major producing countries, with a notable increase in output from India and Brazil leading to bearish market conditions [2][3][4]. Group 1: Sugar Price Movements - March NY world sugar 11 (SBH26) increased by +0.26 (+1.77%), while March London ICE white sugar 5 (SWH26) rose by +7.20 (+1.72%) due to a weaker dollar prompting short-covering in sugar futures [1]. - Sugar prices have recently retreated to three-week lows, primarily influenced by increased production in India and Brazil [2]. Group 2: Production Insights - The India Sugar Mill Association (ISMA) reported a significant increase in Indian sugar production, with a +43% year-on-year rise to 4.11 million metric tons (MMT) for the period of October-November [2]. - Brazil's Conab raised its sugar production estimate for 2025/26 to 45 MMT, reflecting a bullish outlook for Brazilian sugar output [3]. - The ISMA also revised its 2025/26 India sugar production estimate to 31 MMT, marking an increase of +18.8% year-on-year [6]. Group 3: Global Supply Outlook - 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 [4]. - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 MMT, up by +1.2 MMT from a previous estimate [5]. - The robust global sugar supply outlook has negatively impacted sugar prices since early October, with London sugar reaching a 4.75-year low and NY sugar hitting a 5-year low [5].