Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoint - The SR509 contract of sugar is expected to be prone to decline in the short - term but with limited downside space, and there is support at the price of 5600. In the long - term, the global sugar supply - demand pattern will remain loose, and the SR2509 contract is expected to oscillate weakly. It is recommended to short at high prices within the range. Follow - up data such as UNICA bi - weekly data, China Sugar Association's production, sales and inventory data, and customs import data should be monitored [4]. 3. Summary According to Relevant Catalogs International Supply - **Brazil Production**: - The 2024/25 Brazilian sugar production was 4017 tons, a decrease of 225 tons compared to the previous season, with a decline of 5.3%. As of the second half of June 2025/26, the cumulative sugar production was 1224.9 tons, a year - on - year decline of 14.25%. The precipitation in the first half of June was relatively high, affecting the crushing progress. The sugar - to - cane ratio continued to rise, offsetting the impact of the decline in crushing volume and sugar content. The recent precipitation will affect the raw sugar price. The 2025/26 production is expected to increase, with an estimated output of about 4200 tons [44][45][46]. - As of the second half of June 2025/26, the cumulative cane input in the central - southern region was 20619.8 tons, a year - on - year decline of 14.00%. The cumulative sugar - to - cane ratio was 51.02%, an increase of 2.33 percentage points compared to the same period last year. The cumulative sugar production was 1224.9 tons, a year - on - year decline of 14.25% [53]. - As of July 11, the ethanol - to - gasoline ratio in São Paulo, Brazil was 65.38%, and ethanol had an advantage in sales. The ethanol - converted sugar price was about 14.78 cents per pound, and the ICE raw sugar settlement price was 16.56 cents per pound, with the raw sugar having an advantage of about 1.78 cents per pound over the ethanol - converted sugar price, which continued to decline compared to the previous week [68]. - Brazil's sugar exports in the first two weeks of July were 136.99 tons, a year - on - year decrease of 37.88 tons, a decline of 21.66%. As of the week of July 9, the quantity of sugar waiting to be shipped at ports was 368.56 tons, a week - on - week increase of 47.96 tons, an increase of 1.96% [87]. - As of June 30, Brazil's sugar inventory was 401.6657 tons, at a relatively low level in the past five years, but the subsequent inventory accumulation pattern was obvious [84]. - **India and Thailand Production**: - India's sugar production in the 2024/25 season is estimated to be about 2610 - 2620 tons. The end - of - year inventory is expected to be 520 - 530 tons, ensuring a balance between supply and demand. The 2025/26 season is expected to see a strong recovery in production, with an estimated output of about 3500 tons [86]. - Thailand's sugar production in the 2024/25 season was 1004.18 tons, a significant increase compared to the previous year. In the 2025/26 season, production is expected to continue to increase slightly, with MitrPhol Group estimating 1150 tons and USDA estimating 1026 tons [93]. - **Global Production**: - The global sugar supply in the 2024/25 season was still in a loose pattern but tightened marginally compared to the previous period. In the 2025/26 season, the supply is expected to turn loose. Some institutions predict a supply surplus, such as Czarnikow predicting a 750 - ton surplus, Datagro predicting a 153 - ton surplus, and Green Pool predicting a 115 - ton surplus [96][97]. Domestic Supply - **Production**: - The 2024/25 domestic sugar - making season ended on May 23. The total sugar production in the season was 1116.21 tons, a year - on - year increase of 119.89 tons, an increase of 12.03%. The cumulative sugar sales were 811.38 tons, a year - on - year increase of 152.1 tons, an increase of 23.07%. The cumulative sugar sales rate was 72.69%, 6.52 percentage points faster than the same period last year [108][113]. - In Guangxi, the 2024/25 sugar production was 646.50 tons, a year - on - year increase of 28.36 tons. As of the end of June, the cumulative sugar sales were 514.06 tons, a year - on - year increase of 61.44 tons, and the sales rate was 79.51%, 6.29 percentage points higher than the same period last year [113]. - **Import**: - The in - quota import volume is 194.5 tons per year, with a 15% tariff, and the out - of - quota import tariff is 50%. In June 2025, the imported sugar was 42 tons, a year - on - year increase of 39 tons. In the first half of 2025, the cumulative imported sugar was 106 tons, a year - on - year decrease of 25 tons. From the beginning of the 2024/25 season to the end of June, the cumulative imported sugar was 251 tons, a year - on - year decrease of 65 tons. The out - of - quota import profit window opened earlier, and the import volume is expected to increase significantly in the third quarter [128]. - Since 2025, the import of sugar syrup and pre - mixed powder has been restricted. In May 2025, the import of sugar syrup and pre - mixed powder (tax number 1702.90, 2106.906) was 6.43 tons, a year - on - year decrease of 15.06 tons. The import of goods under 170290 remained at a low level, while the import of goods under 2106906 increased significantly year - on - year but decreased month - on - month [143]. Demand and Inventory - **Demand**: - The peak demand seasons for sugar are the summer cold - drink and ice - cream consumption season and the Spring Festival stocking season. After the Spring Festival, the consumption is in the off - season, but the sugar sales data from February to April were higher than in previous years, mainly due to the transfer of some sugar factory inventories to third - party inventories. As of May 2025, the national cumulative sugar sales were 811.38 tons, a 23.07% increase year - on - year, and the sales rate was 72.68%, 6.52 percentage points faster than the same period last year. In Guangxi, as of June 2025, the cumulative sugar sales were 514.06 tons, a 6.29 - percentage - point increase in the sales rate compared to the same period last year [150]. - **Inventory**: - As of May 2025, the national industrial inventory was 304.83 tons, a year - on - year decrease of 82.21 tons. In Guangxi, as of June 2025, the industrial inventory was 132.44 tons, a year - on - year decrease of 33.08 tons [153].

Core Insights - Weak demand has raised alarms, leading to a significant reduction in India's sugar consumption forecast, indicating a shift in supply-demand dynamics [1] - The potential for a turnaround in white sugar price trends remains uncertain amidst these changes [1] Group 1: Demand and Consumption - India's sugar consumption forecast has been drastically lowered due to weak demand [1] - This decline in consumption is expected to impact the overall sugar market significantly [1] Group 2: Supply-Demand Dynamics - A new supply-demand landscape is emerging in the sugar industry, influenced by the changes in India's consumption patterns [1] - The industry is closely monitoring how these shifts will affect white sugar prices moving forward [1]