1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Despite the marginal improvement in the global sugar market fundamentals, the supply surplus situation remains unchanged. In the domestic market, sugar production is increasing, the supply gap is narrowing, and structural contradictions still exist. The cost of out - of - quota imports is lower than domestic production costs, which reduces the forward domestic futures and spot price estimates. There is an opportunity for low basis, and the SR2609 contract may have beet sugar warehouse receipt delivery pricing, with a high probability of high - basis delivery as fundamental trading returns [1][20] 3. Summary by Relevant Sections 3.1 Global Sugar Market Fundamentals - The global sugar market fundamentals have improved marginally. ISO has lowered the supply surplus for the 25/26 sugar season to 122 million tons (previously 163 million tons) and increased the supply shortage for the 24/25 sugar season to 346 million tons (previously 292 million tons) [4] - India has lowered its sugar production and export data for the 25/26 sugar season. ISMA estimates the total sugar production to be 32.4 million tons, with an ethanol diversion of 3.1 million tons and sugar production of 29.3 million tons. The expected export volume is 700,000 tons, lower than the 900,000 tons in the 24/25 sugar season [6] 3.2 Domestic Market Situation - Domestic sugar production is increasing, and the supply gap is narrowing. The core of the domestic sugar market is the total volume and structure of imports. In the 25/26 sugar season, China's sugar production is expected to be 11.7 million tons, consumption 15.7 million tons, and imports 5 million tons. Due to the decrease in the supply gap and the continuous opening of the out - of - quota import window, the pricing anchor point is highly contested [9] - The basis of the SR2601 contract declined significantly in Q4 2025. Since late February 2026, the basis of the SR2605 and SR2609 contracts has reached a low level compared to the same period in previous seasons. As of the end of February, the basis of the SR2605 contract is 86 yuan/ton lower year - on - year, and that of the SR2609 contract is 218 yuan/ton lower year - on - year [12][14] - Beet sugar production is increasing, and beet sugar and Yunnan sugar account for a high proportion in warehouse receipts. Low basis is conducive to increasing registered warehouse receipts. As of March 2, 2026, the number of registered Zhengzhou sugar warehouse receipts is 14,461, with about 1,626 from Yunnan and 5,836 from beet sugar in the sales area [16] 3.3 Opportunity of Low Basis - Internationally, the fundamentals have improved marginally, but the market is in a weak - expectation pattern. The New York raw sugar price has dropped to a low of 13 - 14 cents per pound, with both absolute and relative valuations being low [19] - Domestically, production is increasing, the supply gap is narrowing, and the pricing anchor point is highly contested. The SR2609 contract may have beet sugar warehouse receipt delivery pricing, and as fundamental trading returns, the probability of high - basis delivery is high [20]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Focus on low basis opportunities in the sugar market [1] 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - The raw sugar price is 14.33 cents/pound, with a year-on-year increase of 0.22; the mainstream spot price is 5,310 yuan/ton, up 10 yuan year-on-year; the futures main contract price is 5,261 yuan/ton, up 33 yuan year-on-year [1] - The 15 spread is 46 yuan/ton, up 31 yuan year-on-year; the 59 spread is -13 yuan/ton, down 2 yuan year-on-year; the mainstream spot basis is 49 yuan/ton, down 23 yuan year-on-year [1] 3.2 Macro and Industry News - As of January 31, the sugar production in the 25/26 sugar season in India increased by 17% year-on-year; Brazil exported 2.02 million tons in January, a year-on-year decrease of 2.1%; China imported 580,000 tons of sugar in December, an increase of 190,000 tons [1] - As of the end of January, the cumulative sugar production in Guangxi in the 25/26 sugar season was 4.03 million tons, a decrease of 790,000 tons, and the sugar production rate was 12.05%, a year-on-year decrease of 1.14 percentage points [1] - Attention should be paid to changes in China's import policies for syrup and premixed powder and the sales progress in production areas [1] 3.3 Domestic Market - CAOC expects the domestic sugar production in the 25/26 sugar season to be 11.7 million tons (previous value: 11.2 million tons), consumption to be 15.7 million tons (previous value: 15.9 million tons), and imports to be 5 million tons [2] - As of the end of September, the national sugar production in the 24/25 sugar season was 11.16 million tons, an increase of 1.2 million tons; the cumulative sugar sales were 10.48 million tons, an increase of 870,000 tons; the cumulative sales rate was 93.9%, a decrease of 2.6 percentage points [2] - As of the end of December, China's cumulative sugar imports in the 25/26 sugar season were 1.77 million tons, an increase of 310,000 tons [2] 3.4 International Market - ISO expects a global sugar supply surplus of 1.63 million tons in the 25/26 sugar season (previous value: a shortage of 230,000 tons), and a global sugar supply shortage of 2.92 million tons in the 24/25 sugar season [3] - As of January 16, the cumulative sugarcane crushing volume in the central and southern regions of Brazil in the 25/26 sugar season decreased by 2.22 percentage points year-on-year, with a cumulative sugar production of 40.24 million tons, an increase of 350,000 tons, and the cumulative MIX was 50.78%, a year-on-year increase of 2.63 percentage points [3] - As of January 31, the sugar production in India in the 25/26 sugar season was 19.31 million tons, an increase of 2.78 million tons; as of January 17, the cumulative sugar production in Thailand in the 25/26 sugar season was 2.87 million tons, a decrease of 560,000 tons [3] 3.5 Trend Intensity - The trend intensity of sugar is 0, indicating a neutral view [4]