农产品组行业研究报告：增产周期未改，市场仍有反复

1. Report Industry Investment Rating No information provided in the content. 2. Core Views of the Report - The global sugar market is in an increasing production cycle, which will continue to suppress the ICE raw sugar price in the long - term. However, in the short - term, the supply - side pressure has been largely reflected. As the raw sugar price continues to fall, the narrowing sugar - ethanol price difference will increase the uncertainty of Brazil's sugar - making ratio and estimated production, limiting the downside space of raw sugar and presenting a possibility of a short - term oversold rebound. Attention should be paid to India's export and ethanol policies. If India's increased production cannot be converted into exports, the trade flow may not increase significantly in the new season, and there may be a phased rebound opportunity for the outer market after the fourth quarter [5][53]. - For Zhengzhou sugar, the sales and production progress of domestic sugar this season has been consistently fast, and the industrial inventory has dropped to a historical low in the same period, making the spot price relatively firm. However, as the outer market weakens, the profit from out - of - quota imports has rebounded to a high level in the same period. The arrival of subsequent shipments will exert continuous pressure. The supply pressure at the import end is expected to increase significantly from July to August, limiting the upside space of Zhengzhou sugar. It is expected to fluctuate weakly within a range in the third quarter. In the fourth quarter, due to the fast inventory depletion of sugar mills this year and the possibility of a delayed start of the new season, there may be a local inventory shortage in October, which may boost domestic sugar prices. But the production in the new season is expected to change little year - on - year, and the downward pressure on sugar prices will increase as new sugar is launched, so a bearish view is maintained in the long - term [6][54]. - In the short - term, it is recommended to mainly conduct high - selling and low - buying within the range, and maintain a view of short - selling on rallies in the medium - and long - term [7]. 3. Summary According to the Directory 3.1 2025 First - Half White Sugar Market Review - In 2025, sufficient rainfall in Brazil in early January and India's resumption of exports pushed the raw sugar price to continuously hit bottom, breaking the 18 - cent per pound support level. However, the sharp drop in Brazil's sugar production at the end of the season and the downward revision of India's sugar production estimate drove the raw sugar futures price to rebound after the Spring Festival, leading to the strengthening of Zhengzhou sugar. At the end of February, after the delivery of the ICE raw sugar 03 contract, the outer market stopped rising due to delivery issues and returned to a downward trend. Then, affected by India's further downward - revised production estimate and dry weather in Brazil, it rebounded to around 20 cents per pound. Zhengzhou sugar also strengthened following the raw sugar, with the main contract reaching a maximum of around 6,200 yuan per ton. In April, the start of Brazil's new season with an optimistic production outlook pressured the outer market to fall again. Domestic Zhengzhou sugar was relatively resilient due to the continuous drought in Guangxi from autumn to spring, showing a pattern of domestic strength and foreign weakness. Since May, both domestic and foreign sugar prices have declined in tandem. Although Brazil's bi - weekly production data at the beginning of the new season showed a year - on - year decline in sugar production in the central - southern region and low yields, the market's strong expectation of overall sugar production increase in Brazil in the 25/26 season limited the boost to the market. The expectation of increased supply continuously suppressed the raw sugar futures price. Abundant rainfall in India and Thailand in the Northern Hemisphere strengthened the expectation of global production increase in the new season, pushing the raw sugar futures price down to around 16 cents per pound. In China, due to the improvement of rainfall in Guangxi since late April, the drought in sugarcane was basically relieved, and the expectation of imports increased after the out - of - quota import profit window opened. Zhengzhou sugar's main contract followed the outer market down to around 5,600 yuan per ton. Since mid - June, the raw sugar futures price has gradually stopped falling and stabilized. In China, due to favorable sales and production data, the spot price was firm, and the Zhengzhou sugar futures price also rebounded driven by the stabilization of the outer market [12]. 3.2 International Sugar Market Supply - Demand Analysis 3.2.1 Brazil: Narrowing Sugar - Ethanol Price Difference, Risk of High Sugar - Making Ratio Decline - In the first half of June, affected by rainfall on the harvesting progress, the sugarcane crushing volume and sugar production in the central - southern region of Brazil decreased significantly year - on - year. As of June 16, 2025, in the 25/26 season, the cumulative sugarcane crushing volume in the central - southern region was 163.575 million tons, a year - on - year decrease of 14.33%; the cumulative sugar production was 9.404 million tons, a year - on - year decrease of 14.63% [16]. - Current institutions' estimates of Brazil's central - southern sugar production in the 25/26 season vary widely, ranging from 39.3 million to 43.3 million tons, but most hold the view of a slight increase. The international market's increasing dependence on Brazil's supply means that changes in Brazil's estimated production may cause sharp fluctuations in sugar prices. Currently, only the sugar - making ratio in Brazil's new season has risen to a high level, while the data on sugarcane yield per unit and sugar content are poor, so it is necessary to continuously track later production data and estimated production [17]. - As of the end of June, the sugar - equivalent price of hydrous ethanol in Brazil was around 14.8 cents. With the recent decline of raw sugar, the sugar - ethanol price difference has rapidly narrowed to around 1 cent, providing limited support for the sugar - making ratio. Some sugar mills with preferential ethanol tax policies in the central - southern region have started to shift production focus to ethanol, and the high sugar - making ratio may decline later. In addition, Brazil's National Petroleum Policy Council approved an increase in the mandatory mixing ratio of anhydrous ethanol in gasoline from 27% to 30% and the mixing ratio of biodiesel in ordinary diesel from 14% to 15% on June 25, which will take effect on August 1. This policy change will increase Brazil's annual ethanol demand, boost the ethanol price, and raise the bottom support for the raw sugar futures price [22]. - Brazil exported 2.2566 million tons of sugar in May, a year - on - year decrease of 554,500 tons or 19.72%. As of May in the 2025/26 season (from April to March of the next year), the cumulative sugar export was 3.8092 million tons, a year - on - year decrease of 18.84%. Due to a large amount of exports in the early stage, Brazil's sugar inventory has dropped to a historical low, resulting in a significant decline in exports since April. However, as Brazil's production progresses, exports are expected to gradually recover after June. If Brazil's exports accelerate later, the low - inventory situation may become normal [26]. 3.2.2 India: Exceeding - Expected Production Reduction in the 24/25 Season, Significant Production Rebound Expected in the New Season - In the 24/25 season, India's sugar production reduction exceeded expectations. As of May 15, 2024/25, India's cumulative sugar production was 25.74 million tons, a year - on - year decrease of 5.8 million tons or 18.39%. The NFCSF predicted that India's total sugar production in the 2024/25 season would be around 26.11 million tons [28]. - In terms of exports, due to the decline in India's production and the firm domestic sugar price, the export parity of raw sugar remained around 20 cents, making exports unattractive. Although the Indian government allowed 1 million tons of sugar exports in the 24/25 season, the final export volume is expected to be less than the quota. Currently, there are expectations of expanded planting in Maharashtra and Karnataka in India, and this year's monsoon rainfall is higher than the annual average. The market generally expects a significant increase in India's sugar production in the 25/26 season. The chairman of the NFCSF recently estimated that India would witness a strong production recovery in the 25/26 season, giving an estimate of 35 million tons. However, there is still uncertainty about whether significant production increase can be achieved based on previous production situations. Moreover, currently, there is no export profit in India. If the increased production cannot be converted into exports, the impact on the global sugar trade flow may be limited [29]. 3.2.3 Thailand: Slight Increase in Sugarcane Area and Sugar Production Expected in the New Season - Thailand's 24/25 season sugarcane crushing ended on April 8. In this season, a total of 92 million tons of sugarcane were crushed, a year - on - year increase of 12%, and the cumulative sugar production was 10.05 million tons, a year - on - year increase of 15%. The sugar production rate also increased to 10.92%, higher than 10.68% in the same period last year [32]. - Although the Thai government has taken measures to boost the cassava price, the profit from growing sugarcane is still higher than that of cassava. Most institutions expect a slight increase in Thailand's sugarcane area and sugar production in the 25/26 season. Datagro's latest estimate is that Thailand's production will increase from 10.05 million tons to 11.18 million tons. Alvean expects Thailand's sugar production to increase to 11.1 million tons, while OSCB expects Thailand's sugar production in the 25/26 season to be 10.05 million tons [35]. 3.2.4 Global: The Global Sugar Market is Expected to Shift from Shortage to Slight Surplus in the 25/26 Season - In the 24/25 season, the production in the Northern Hemisphere was lower than expected, and institutions increased their estimates of the global sugar market supply - demand gap in the 24/25 season. Since most institutions are optimistic about Brazil's sugar supply in the 25/26 season, the global sugar market supply - demand pattern is expected to shift from shortage to surplus in the 25/26 season, but there are still differences in the scale of the surplus and the extent of Brazil's production increase [37]. 3.3 Domestic Sugar Market Supply - Demand Analysis 3.3.1 Production and Sales: Faster Inventory Reduction of Domestic Sugar Year - on - Year, New - Season Production May Change Little - As of the end of May 2025, the 2024/25 sugar - making season had ended. In this season, China produced a total of 11.1621 million tons of sugar, a year - on - year increase of 1.1989 million tons or 12.03%. The cumulative sugar sales were 8.1138 million tons, a year - on - year increase of 1.521 million tons or 23.07%; the cumulative sugar sales rate was 72.69%, 6.52 percentage points faster year - on - year [39]. - The production and sales data of domestic sugar have been continuously improving. Although the final sugar production in the 24/25 season returned to over 11 million tons, the sales rate has remained high, and the inventory reduction speed has been faster year - on - year. As of the end of May, the industrial inventory was 3.0483 million tons, a year - on - year decrease of 322,100 tons, at a low level in the same period. Regarding the growth of sugarcane in the new season, after a survey in the Guangxi main - producing area in late June, the overall seedling situation in Liuzhou is better than that in Laibin, and Chongzuo is similar to Laibin. The overall plant height is about 10 - 15 cm shorter due to the previous drought, but it may catch up if the weather is normal later. The sugar content is expected to be lower than last year, but the expected slight increase in the planting area offsets the decrease in sugar content. Therefore, the overall sugar production in the new season is expected to change little compared with the previous season, and whether it will increase or decrease slightly depends on the later weather and growth [40]. 3.3.2 Imports: Out - of - Quota Import Window Opened, Incoming Quantity of Raw Sugar will Increase - According to customs data, China imported 350,000 tons of sugar in May 2025, a year - on - year increase of 330,000 tons. From January to May 2025, the cumulative sugar import was 630,000 tons, a year - on - year decrease of 640,000 tons. As of the end of May in the 24/25 season, the cumulative sugar import was 2.09 million tons, a year - on - year decrease of 1.04 million tons. From January to April, the quantity of imported sugar sources in China was limited, mainly quota - based imports, which supported the market to maintain a high - level shock. In May, out - of - quota licenses were gradually issued, and out - of - quota raw sugar gradually arrived at ports. The sugar import volume in May increased significantly both month - on - month and year - on - year. Due to China's tightening of the import of syrup and premixed powder, the supply - demand gap needs to be filled by out - of - quota imports, and the market pricing is re - anchored to the out - of - quota import cost. As the raw sugar futures price continues to weaken, the import profit of out - of - quota Brazilian sugar has rebounded to a high level in recent years. It is expected that the incoming quantity of raw sugar will increase from July to August, and attention should be paid to the later import rhythm [43]. 3.3.3 Substitutes: Tighter Policy Control, Significant Decline in Import Volume of Syrup and Premixed Powder - China has successively suspended the import of syrup and premixed powder from Thailand and Vietnam. In May, there was basically no new import from these two countries under the 1702 tariff item. According to customs data, China imported a total of 64,200 tons of syrup and premixed powder in May, a year - on - year decrease of 150,700 tons, the second - lowest level in the same period in the past five years. The import quantity of syrup and white sugar premixed powder under the 1702 tariff item was 16,500 tons, a year - on - year decrease of 197,000 tons. From January to May 2025, the cumulative import was 190,300 tons, a year - on - year decrease of 73.94%. As of May in the 2024/25 season, the cumulative import of three types of commodities under the 1702 tariff item in the country was 823,200 tons, a year - on - year decrease of 28.13% [47]. 3.4 2025 Second - Half White Sugar Market Outlook - Similar to the core view, the global sugar market's increasing production cycle will suppress the ICE raw sugar price in the long - term. In the short - term, there is a possibility of an oversold rebound, and attention should be paid to India's policies. After the fourth quarter, the outer market may have a phased rebound opportunity [53]. - For Zhengzhou sugar, the short - term support from fast production and sales progress may be limited by the expected increase in imports in the third quarter. In the fourth quarter, there may be a local inventory shortage, which may boost prices, but the long - term trend is still bearish [54].