Core Viewpoint - Sugar prices are experiencing fluctuations due to varying production levels in major producing countries, with a notable increase in output from India and Brazil leading to bearish market conditions [2][3][4]. Group 1: Sugar Price Movements - March NY world sugar 11 (SBH26) increased by +0.26 (+1.77%), while March London ICE white sugar 5 (SWH26) rose by +7.20 (+1.72%) due to a weaker dollar prompting short-covering in sugar futures [1]. - Sugar prices have recently retreated to three-week lows, primarily influenced by increased production in India and Brazil [2]. Group 2: Production Insights - The India Sugar Mill Association (ISMA) reported a significant increase in Indian sugar production, with a +43% year-on-year rise to 4.11 million metric tons (MMT) for the period of October-November [2]. - Brazil's Conab raised its sugar production estimate for 2025/26 to 45 MMT, reflecting a bullish outlook for Brazilian sugar output [3]. - The ISMA also revised its 2025/26 India sugar production estimate to 31 MMT, marking an increase of +18.8% year-on-year [6]. Group 3: Global Supply Outlook - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million metric tons for 2025-26, driven by increased production in India, Thailand, and Pakistan [4]. - Czarnikow has increased its global sugar surplus estimate for 2025/26 to 8.7 MMT, up by +1.2 MMT from a previous estimate [5]. - The robust global sugar supply outlook has negatively impacted sugar prices since early October, with London sugar reaching a 4.75-year low and NY sugar hitting a 5-year low [5].

Core Insights - Sugar prices have increased slightly, with March NY world sugar closing up by 0.27% and March London ICE white sugar up by 0.19, indicating a consolidation phase below recent highs [1][2] Supply Dynamics - India's food ministry is considering raising the price of ethanol for gasoline blending, which may lead sugar mills to prioritize ethanol production over sugar, potentially reducing sugar supplies [2] - India has allowed mills to export 1.5 million metric tons (MMT) of sugar for the 2025/26 season, a reduction from earlier estimates of 2 MMT, due to a quota system introduced after production issues [3] Production Forecasts - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 MMT for 2025-26, a shift from a deficit of 2.916 MMT in 2024-25, driven by increased production in India, Thailand, and Pakistan [4] - Global sugar production is expected to rise by 3.2% year-on-year to 181.8 million metric tons in 2025-26 [4] Price Pressures - The outlook for robust global sugar supplies has negatively impacted sugar prices, with recent lows recorded in both London and NY sugar markets due to higher output in Brazil and expectations of a global surplus [5] - Brazil's crop forecasting agency, Conab, has raised its sugar production estimate for 2025/26 to 45 MMT, contributing to bearish price sentiment [6] - Brazil's sugar output in the second half of October increased by 16.4% year-on-year, with a higher percentage of sugarcane being crushed for sugar compared to the previous year [6]