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]