Strength in Gasoline and Supply Disruptions Underpin Sugar Prices

Core Insights - Sugar prices are experiencing mixed trends, with NY sugar reaching a 5-month high while London sugar prices are declining due to a stronger dollar [1] Group 1: Price Movements - NY world sugar 11 (SBK26) increased by +0.22 (+1.43%), while May London ICE white sugar 5 (SWK26) decreased by -1.70 (-0.38%) [1] - Gasoline prices are rising, which is bullish for sugar as it encourages sugar mills to increase ethanol production, potentially impacting sugar supply [2] Group 2: Supply Dynamics - Supply disruptions from the closure of the Strait of Hormuz have reduced approximately 6% of the world's sugar trade, affecting refined sugar output [3] - Brazil's sugar production in the Center-South fell by -36% year-on-year in the second half of January, although cumulative output for 2025-26 rose by +0.9% year-on-year [6] Group 3: Global Sugar Surplus Projections - Analysts predict a global sugar surplus of 3.4 million metric tons (MMT) for the 2026/27 crop year, following an 8.3 MMT surplus in 2025/26 [4] - The International Sugar Organization (ISO) forecasts a +1.22 MMT sugar surplus in 2025-26, driven by increased production in India, Thailand, and Pakistan [5] Group 4: Regional Production Insights - India's sugar output for 2025-26 is projected to be 29.3 MMT, up 12% year-on-year, with a reduction in the estimate for sugar used for ethanol production, potentially allowing for increased sugar exports [7]