Core Viewpoint - Sugar prices are experiencing volatility due to varying production forecasts and export policies from major producing countries like Brazil and India, leading to both bullish and bearish market sentiments. Group 1: Price Movements - March NY world sugar 11 (SBH26) decreased by -0.11 (-0.72%) while March London ICE white sugar 5 (SWH26) increased by +3.30 (+0.76) [1] - Sugar prices faced long liquidation pressure after an earlier rally, influenced by forecasts of reduced sugar production in Brazil for the 2026/27 season [2] Group 2: Production Forecasts - Brazil's sugar production is expected to decline by -3.91% to 41.8 million metric tons (MMT) in 2026/27 from 43.5 MMT in 2025/26, with exports projected to fall -11% year-on-year to 30 MMT [2] - India's sugar production estimate for 2025/26 was raised to 31 MMT, reflecting an increase of +18.8% year-on-year, with production from October 1 to December 15 showing a +28% year-on-year increase to 7.83 MMT [4] - Brazil's crop forecasting agency, Conab, raised its 2025/26 sugar production estimate to 45 MMT from 44.5 MMT, while Unica reported a +1.1% year-on-year increase in cumulative sugar output to 39.904 MMT [5] Group 3: Export Policies - India's government may permit additional sugar exports to alleviate a domestic supply glut, allowing mills to export 1.5 MMT of sugar in the 2025/26 season [3] - The Indian Sugar Mill Association (ISMA) has adjusted its estimate for sugar used for ethanol production down to 3.4 MMT, potentially increasing sugar exports [4] Group 4: Market Outlook - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million metric tons in 2025-26, driven by increased production in India, Thailand, and Pakistan, following a deficit in the previous year [6] - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 MMT, up +1.2 MMT from earlier estimates [6]

Core Insights - Sugar prices have declined to one-week lows due to expectations of increased sugar exports from India, as the government may allow additional exports to alleviate a domestic supply surplus [2] Group 1: Indian Sugar Market - India's food ministry announced a potential allowance for mills to export 1.5 million metric tons (MMT) of sugar in the 2025/26 season, following a quota system introduced in 2022/23 due to reduced production from late rains [2] - The India Sugar Mill Association (ISMA) reported a significant increase in Indian sugar production for the 2025/26 season, with estimates raised to 31 MMT, reflecting an 18.8% year-on-year increase [4] - The National Federation of Cooperative Sugar Factories projected a 19% year-on-year increase in India's sugar production to 34.9 MMT for 2025/26, following a decline of 17.5% in 2024/25 [5] Group 2: Brazilian Sugar Market - The Brazilian real has weakened, reaching a 4.5-month low against the dollar, which is expected to boost export sales from Brazilian sugar producers [3] - Brazil's crop forecasting agency, Conab, raised its sugar production estimate for 2025/26 to 45 MMT, up from a previous forecast of 44.5 MMT, indicating a positive outlook for sugar output [6] - Unica reported that Brazil's cumulative sugar output for the 2025/26 season increased by 1.1% year-on-year to 39.904 MMT, with a higher percentage of cane crushed for sugar production [6]