Report Summary 1. Report Industry Investment Rating - No investment rating provided in the report. 2. Core View of the Report - The international raw sugar price is expected to fluctuate widely at a low level in the short term due to good production prospects in major Asian sugar - producing countries and concerns about the sugar content of sugarcane in the 2025/26 season, with signs of improved demand. In the domestic market, the profit from out - of - quota imports remains relatively high, releasing import pressure. Beet sugar will start crushing in September, increasing supply. Demand is expected to rise due to the hot summer and upcoming double - festival stocking. The inventory reduction process has slowed down, and the new - season production is expected to be at a high level in the past four years. Overall, the domestic market will fluctuate in the short term, and the operation suggestion is to wait and see [2]. 3. Summary by Relevant Catalogs Futures Market - The closing price of the main futures contract for sugar was 5,672 yuan/ton, up 8 yuan; the main contract position was 322,832 lots, up 7,392 lots; the number of warehouse receipts was 16,931, down 173; the net long position of the top 20 futures positions was - 26,523 lots; the effective warehouse receipt forecast was 0; the estimated import - processing price of Brazilian sugar within the quota was 4,561 yuan/ton, up 9 yuan; the estimated import - processing price of Thai sugar within the quota was 4,579 yuan/ton, down 61 yuan; the estimated price of imported Brazilian sugar outside the quota (50% tariff) was 5,796 yuan/ton, up 10 yuan; the estimated price of imported Thai sugar outside the quota (50% tariff) was 5,819 yuan/ton, down 82 yuan [2]. 现货市场 - The spot price of white sugar in Kunming was 5,855 yuan/ton, down 5 yuan; in Nanning it was 5,980 yuan/ton, unchanged; in Liuzhou it was 6,040 yuan/ton, unchanged [2]. Upstream Situation - The national sugar - crop sown area was 1,480 thousand hectares, up 60 thousand hectares; the sown area of sugarcane in Guangxi was 835.09 thousand hectares, down 12.86 thousand hectares [2]. Industry Situation - The cumulative national sugar production was 1,116.21 million tons, up 5.49 million tons; the cumulative national sugar sales volume was 811.38 million tons, up 86.92 million tons; the national industrial sugar inventory was 304.83 million tons, down 81.43 million tons; the national sugar sales rate was 72.69%, up 7.47 percentage points; the monthly sugar import volume was 740,000 tons, up 320,000 tons; the total monthly sugar exports from Brazil were 3.5937 million tons, up 0.2347 million tons; the price difference between imported Brazilian sugar and the current price of Liuzhou sugar within the quota was 1,322 yuan/ton, down 2 yuan; the price difference between imported Thai sugar and Liuzhou sugar within the quota was 1,304 yuan/ton, up 68 yuan; the price difference between imported Brazilian sugar and the current price of Liuzhou sugar outside the quota (50% tariff) was 87 yuan/ton, down 3 yuan; the price difference between imported Thai sugar and Liuzhou sugar outside the quota (50% tariff) was 64 yuan/ton, up 89 yuan [2]. Downstream Situation - The cumulative year - on - year growth rate of refined sugar production was 16.7%, up 2.6 percentage points; the cumulative year - on - year growth rate of soft drink production was 2.9%, down 0.1 percentage point [2]. Option Market - The implied volatility of at - the - money call options for sugar was 8.4%, down 0.15 percentage points; the implied volatility of at - the - money put options for sugar was 8.37%, down 0.19 percentage points; the 20 - day historical volatility of sugar was 7.96%, up 0.21 percentage points; the 60 - day historical volatility of sugar was 6.31%, up 0.05 percentage points [2]. Industry News - China's sugar imports in July were 740,000 tons, an increase of 320,000 tons (76.2%) from the previous month and a year - on - year increase of 76.4%. From January to July, China's sugar imports were 1.78 million tons, a year - on - year increase of 4%. The ICE raw sugar October contract closed down 0.66% last Friday, and the domestic sugar 2601 contract closed up 0.42% on Monday. The sugar production in the central - southern main producing areas of Brazil in the second half of July decreased by 0.8% year - on - year to 3.614 million tons [2].

Core Viewpoint - Brazil's sugar production is lagging, but the sugar-to-ethanol ratio is rising, leading to strong expectations of reduced production for the new season, while markets anticipate increased production from India and Thailand, which is suppressing sugar prices [1] Group 1: Production and Market Dynamics - Brazil's sugar production progress is slow, with a significant decline in the crushing volume, down 20.24% year-on-year to 76.714 million tons as of mid-May 2025/26 [1] - The sugar production rate in Guangxi has improved, with cumulative sugar sales reaching 4.6453 million tons by the end of May, an increase of 537,100 tons year-on-year, and a production-to-sales ratio of 71.85%, up 5.39 percentage points [1] - The Indian Sugar Mills Association forecasts an ending stock of 4.8 to 5 million tons for the 2024/25 season, sufficient to meet domestic consumption needs in late 2025, despite a decline in production this season [1] Group 2: Import and Export Trends - China has suspended imports of Thai sugar syrup and premixed powder, although Thailand has expressed willingness to rectify the situation [1] - Sugar imports in May reached 350,000 tons, an increase of 333,100 tons year-on-year, indicating a favorable profit window for imports outside of quotas [1] - The import of sugar syrup and premixed powder in May was 64,200 tons, a significant decrease of 150,700 tons year-on-year, marking the second-lowest level for the same period in five years [1] Group 3: Future Production Expectations - Analysts predict a 5% increase in Brazil's sugar production for the 2025/26 season, reaching 46 million tons [1] - Thailand's sugar production for the 2024/25 season is expected to rise to 10.39 million tons [1] - India's early monsoon rains are anticipated to lead to a strong recovery in sugar production for the 2025/26 season, potentially reaching around 35 million tons [1]