Sugar Prices Sharply Higher as Funds Close Out Short Positions

Group 1: Sugar Price Movements - Sugar prices experienced a significant increase on Friday, with March NY world sugar 11 closing up by +0.34 (+2.35%) and March London ICE white sugar 5 closing up by +9.60 (+2.31%) due to short-covering as funds closed out short positions ahead of the holiday season [1] - Prior to this increase, sugar prices had fallen to 5-week lows on Thursday amid expectations of higher sugar exports from India, as the government indicated it may permit additional exports to alleviate a domestic supply glut [2] Group 2: Indian Sugar Production and Exports - The India Sugar Mill Association (ISMA) reported a substantial increase in Indian sugar production for the 2025-26 season, with production from October 1 to December 15 rising by +28% year-on-year to 7.83 million metric tons (MMT) [3] - ISMA also raised its overall production estimate for India’s 2025-26 sugar output to 31 MMT, an increase of +18.8% year-on-year, while reducing the estimate for sugar used for ethanol production, which may facilitate higher sugar exports [4] - India's National Federation of Cooperative Sugar Factories projected a further increase in sugar production to 34.9 MMT for the 2025-26 season, marking a +19% year-on-year rise, following a significant decline of -17.5% year-on-year in 2024-25 [5] Group 3: Brazilian Sugar Production Outlook - Brazil's crop forecasting agency, Conab, has raised its sugar production estimate for the 2025-26 season to 45 MMT, up from a previous forecast of 44.5 MMT, indicating a bearish outlook for sugar prices [6] - Unica reported that Brazil's cumulative sugar output through November for the 2025-26 season increased by +1.1% year-on-year to 39.904 MMT, with the proportion of cane crushed for sugar rising to 51.12% in 2025-26 from 48.34% in 2024-25 [6]