Sugar Prices Climb as the Brazilian Real Strengthens

Core Insights - Sugar prices have recently increased, with NY sugar reaching a 2-week high and London sugar a 1-week high, driven by a stronger Brazilian real which discourages exports [1] - Increased sugar production in India and Brazil has led to a bearish outlook for sugar prices, with India reporting a significant year-on-year production increase [2][5] - Brazil's sugar production forecast for 2025/26 has been raised, contributing to expectations of a sugar surplus in the coming years [3][4] Group 1: Price Movements - March NY world sugar 11 closed up +0.25 (+1.68%) and March London ICE white sugar 5 closed up +5.20 (+1.23%) [1] - The Brazilian real's rally to a 1-week high against the dollar has sparked short covering in sugar futures, impacting export sales [1] Group 2: Production Trends - Indian sugar production from October to November increased by +43% year-on-year to 4.11 million metric tons (MMT), with more mills crushing cane compared to the previous year [2] - Brazil's sugar production estimate for 2025/26 has been raised to 45 MMT, with a reported +8.7% year-on-year increase in sugar output in the first half of November [3] Group 3: Market 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, reflecting a significant upward revision from previous estimates [4]