Sugar Prices Gain as Dollar Weakness Spurs Short Covering

Core Insights - Sugar prices have recently increased due to a weaker dollar, leading to short covering in sugar futures [1] - Despite the recent price increase, the overall outlook for sugar remains bearish due to anticipated global surpluses [2][6] Global Sugar Production and Surplus - Global sugar production is expected to exceed demand, with estimates of a 2.74 million metric ton (MMT) surplus for 2025/26 and a 156,000 metric ton surplus for 2026/27 [2] - Covrig Analytics has revised its global sugar surplus estimate for 2025/26 to 4.7 MMT, up from 4.1 MMT previously [6] Regional Production Updates - Brazil's sugar output for the 2025-26 season has increased by 0.9% year-on-year to 40.222 MMT, with a higher ratio of cane crushed for sugar [3] - India's sugar production for the 2025-26 season is projected to rise by 22% year-on-year to 15.9 MMT, with an overall production estimate increased to 31 MMT [4] Export Dynamics - India is expected to boost sugar exports, with the government potentially allowing additional exports to alleviate domestic supply issues [5] - The Indian government has set a quota for sugar exports, allowing mills to export 1.5 MMT in the 2025/26 season [5]