Core Viewpoint - Sugar prices have reached 5-week highs due to reduced production estimates in Brazil and potential changes in India's ethanol pricing policy, which may lead to lower sugar supplies [1][2]. Group 1: Price Movements - March NY world sugar 11 (SBH26) increased by +0.21 (+1.41%) and March London ICE white sugar 5 (SWH26) rose by +5.60 (+1.31%) [1]. - Sugar prices have been under pressure since early October due to expectations of robust global sugar supplies, with London sugar hitting a 4.75-year nearest-futures low and NY sugar prices reaching a 5-year nearest-futures low [5]. Group 2: Production Estimates - StoneX revised its Brazil 2026/27 Center-South sugar production estimate down to 41.5 million metric tons (MMT) from 42.1 MMT [1]. - Conab raised its Brazil 2025/26 sugar production estimate to 45 MMT from 44.5 MMT, indicating a bullish outlook for Brazilian sugar output [6]. - Cumulative Center-South sugar output in Brazil through October increased by +1.6% year-on-year to 38.085 MMT [6]. Group 3: Export Policies and Supply Dynamics - India's food ministry is considering increasing the price of ethanol for gasoline blending, which could lead to more sugarcane being diverted to ethanol production, thereby reducing sugar supplies [2]. - India has allowed mills to export 1.5 MMT of sugar for the 2025/26 season, down from earlier estimates of 2 MMT, due to a quota system introduced after reduced production [3]. Group 4: Global Supply Outlook - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for 2025-26, driven by increased production in India, Thailand, and Pakistan, contrasting with a previous deficit forecast [4]. - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 MMT, up by +1.2 MMT from earlier estimates [5].

Core Insights - Sugar prices exhibited mixed results, with NY sugar reaching a 1.5-week high while London sugar declined, influenced by crude oil price movements [2] Group 1: Sugar Market Trends - NY sugar futures closed up +0.11 (+0.70%), while December London ICE white sugar futures closed down -1.90 (-0.41%) [1] - The recent rise in crude oil prices has led to short covering in sugar futures, as WTI crude reached a 1.75-month high, potentially shifting sugar production towards ethanol [2] Group 2: Global Supply and Demand Dynamics - A significant global sugar surplus of +2.8 million metric tons (MMT) is projected for the 2025/26 season, reversing a previous deficit of -4.7 MMT in 2024/25 [3] - Brazil's sugar output increased by +18% year-on-year in the second half of August, with a higher percentage of sugarcane being crushed for sugar, although cumulative output for 2025-26 is down -1.9% year-on-year [4] Group 3: Regional Production Insights - India is expected to divert 4 MMT of sugar for ethanol production in 2025/26, which may lead to increased exports of sugar, exceeding earlier estimates [5] - The International Sugar Organization (ISO) forecasts a global sugar deficit of -231,000 MT for the 2025/26 season, marking the sixth consecutive year of deficits, although this is an improvement from a -4.88 MMT shortfall in 2024/25 [6]

Core Insights - Sugar prices are experiencing mixed trends, with NY sugar reaching a 1.5-week high while London sugar is slightly down [2] - The global sugar market is projected to have a surplus in the upcoming 2025/26 season, reversing the previous year's deficit [3][6] Price Movements - October NY world sugar 11 is up by +0.11 (+0.70%), while December London ICE white sugar 5 is down by -1.20 (-0.26%) [1] - The rise in crude oil prices has led to short covering in sugar futures, benefiting sugar prices indirectly [2] Supply Dynamics - Brazil's sugar output has increased, with a reported rise of +18% year-on-year in the second half of August, contributing to bearish price sentiment [4] - The percentage of sugarcane crushed for sugar in Brazil has also increased, indicating a shift towards higher sugar production [4] Global Production and Consumption - StoneX forecasts a global sugar surplus of +2.8 million metric tons (MMT) for the 2025/26 season, contrasting with a deficit of -4.7 MMT in the 2024/25 season [3] - The International Sugar Organization (ISO) projects a global sugar production increase of +3.3% year-on-year to 180.6 MMT for the 2025/26 season [6] Regional Insights - India's potential diversion of 4 MMT of sugar for ethanol production in 2025/26 may not alleviate its sugar surplus, leading to increased exports [5] - The cumulative sugar output in Brazil for the 2025-26 season has decreased by -1.9% year-on-year, despite the recent increase in production [4]