Sugar Prices Settle Higher as Brazilian Real Strength Spurs Short Covering

Core Insights - Sugar prices have shown volatility, with recent increases attributed to the strength of the Brazilian real and short covering in futures markets [1] - India's sugar production is projected to rise significantly, impacting global sugar supply dynamics [2][3] Group 1: Sugar Price Movements - On March 6, NY world sugar 11 closed up by +0.13 (+0.89%), while March London ICE white sugar 5 increased by +2.50 (+0.60%) [1] - Sugar prices fell to 2-week lows last Friday due to indications of stronger sugar output in India [2] - NY sugar reached a 2.5-month high last Monday based on expectations of reduced future sugar supplies from Brazil [4] Group 2: Indian Sugar Production - The India Sugar Mill Association reported a 25% year-on-year increase in sugar production for 2025-26, reaching 11.90 million metric tons (MMT) compared to 9.54 MMT the previous year [2] - The ISMA raised its 2025/26 sugar production estimate for India to 31 MMT, an increase of +18.8% year-on-year [2] - The Indian government plans to allow mills to export 1.5 MMT of sugar in the 2025/26 season to alleviate domestic supply issues [3] Group 3: Brazilian Sugar Production Outlook - Brazil's sugar production is expected to decline by -3.91% to 41.8 MMT in 2026/27, down from 43.5 MMT in 2025/26 [4] - Conab raised its Brazil 2025/26 sugar production estimate to 45 MMT, up from a previous forecast of 44.5 MMT [5] - Brazil's cumulative sugar output through November 2025-26 rose by +1.1% year-on-year to 39.904 MMT, with an increased ratio of cane crushed for sugar [5]