Core Insights - Sugar prices experienced a slight increase on Friday after a week of significant losses, with NY sugar closing up by 0.52% and London sugar by 0.24% [1] - Brazil's sugar production is on the rise, contributing to increased supply and downward pressure on prices, with a reported 18% year-on-year increase in sugar output for the second half of August [2][4] - The International Sugar Organization forecasts a global sugar deficit for the 2025/26 season, marking the sixth consecutive year of deficits, although the projected deficit is improving compared to the previous year [6] Price Movements - NY world sugar 11 closed at +0.08 (+0.52%) and December London ICE white sugar 5 closed at +1.10 (+0.24%) [1] - Sugar prices have been in a downtrend over the past six months due to expectations of higher production in Brazil [4] Production Insights - Brazil's Center-South sugar output in the second half of August rose to 3.872 million tons, an 18% increase year-on-year, with a higher percentage of sugarcane being crushed for sugar [2] - Cumulative sugar output in Brazil for the 2025-26 season through August fell by 1.9% year-on-year to 26.758 million tons [2] Market Dynamics - India's potential diversion of 4 million tons of sugar for ethanol production in 2025/26 may lead to increased exports, with sugar mills expected to export up to 4 million tons, exceeding earlier estimates [3] - An excessively short position by funds in NY sugar futures could lead to gains during any short-covering rally, with net-short positions increasing significantly [5] Global Outlook - The International Sugar Organization projects a global sugar production increase of 3.3% year-on-year to 180.6 million tons for the 2025/26 season, while global consumption is expected to rise by 0.3% to 180.8 million tons [6]

Group 1 - Sugar prices experienced moderate losses, with October NY world sugar closing down 0.11 (-0.69%) and October London ICE white sugar down 1.70 (-0.35%) [1] - The Indian Sugar and Bio-energy Manufacturers Association has requested permission to export 2 million metric tons (MMT) of sugar for the 2025/26 season, which may impact global sugar supply dynamics [1] - Brazil's sugar production outlook is positive, with a reported 16% year-on-year increase in sugar output in the first half of August, reaching 3.615 million metric tons (MT) [3] Group 2 - Brazil's sugar mills are prioritizing sugar production over ethanol, leading to an increase in sugarcane crushed for sugar, driven by drier cane crops [4] - 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 million metric ton shortfall in 2024/25 [5] - Brazil's government crop forecasting agency, Conab, has reduced its 2025/26 sugar production estimate by 3.1% to 44.5 MMT, citing lower sugarcane yields due to drought and excessive heat [6]

Core Insights - Sugar prices are experiencing upward movement due to a rally in WTI crude oil, which has led to short covering in sugar futures [1] - Brazil's sugar production outlook is mixed, with a reported increase in output for the first half of August but a cumulative decrease for the 2025-26 season [2][5] - The International Sugar Organization forecasts a global sugar deficit for the 2025/26 season, although production is expected to rise [4] Group 1: Sugar Price Movements - October NY world sugar 11 is up by +1.34%, while October London ICE white sugar 5 is up by +0.65% [1] - A +1% increase in WTI crude oil prices is contributing to the rise in sugar prices, as higher crude prices may lead to reduced sugar supplies due to increased ethanol production [1] Group 2: Brazil's Sugar Production - Brazil's Center-South sugar output in the first half of August rose by +16% year-on-year to 3,615 million tons, with the percentage of sugarcane crushed for sugar increasing to 55.00% [2] - However, cumulative sugar output for the 2025-26 season is down -4.7% year-on-year to 22.886 million tons [2] - Conab has reduced its Brazil 2025/26 production estimate by 3.1% to 44.5 million tons, citing lower sugarcane yields due to adverse weather conditions [5] Group 3: Global Sugar Supply and Demand - The International Sugar Organization projects a global sugar deficit of -231,000 tons for the 2025/26 season, improving from a -4.88 million ton shortfall in 2024/25 [4] - Global sugar production is expected to rise by +3.3% year-on-year to 180.6 million tons, while consumption is projected to increase by +0.3% year-on-year to 180.8 million tons [4] - Czarnikow has projected a 7.5 million ton global sugar surplus for the 2025/26 season, the largest surplus in eight years [6]