Dollar Weakness Pushes Sugar Prices Higher

Core Viewpoint - Sugar prices have experienced fluctuations due to varying production levels in major producing countries, with recent data indicating a bearish outlook for future prices driven by increased output in India and Brazil [2][3][4]. Group 1: Sugar Price Movements - On March 1, NY world sugar 11 closed up by 0.24 (+1.64%), while March London ICE white sugar 5 closed up by 7.30 (+1.74%) due to dollar weakness prompting short-covering in sugar futures [1]. - Sugar prices have retreated to three-week lows recently, primarily due to 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 positive outlook for Brazilian sugar output [3]. - Brazil's Center-South sugar output increased by 8.7% year-on-year to 983 thousand metric tons (MT) in the first half of November, contributing to the overall increase in sugar production [3]. Group 3: Global Supply and Surplus Forecasts - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for 2025-26, driven by increased production in India, Thailand, and Pakistan, contrasting with a previous deficit forecast [4]. - A robust global sugar supply 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]. - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 MMT, indicating a growing concern over sugar supply outpacing demand [5]. Group 4: India’s Production and Export Potential - The ISMA has raised its 2025/26 India sugar production estimate to 31 MMT, an 18.8% year-on-year increase, which may enhance India's export capabilities [6]. - The reduction in the estimate for sugar used for ethanol production in India from 5 MMT to 3.4 MMT may further support increased sugar exports [6].