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 are experiencing a significant decline, with NY Sugar reaching a 4.5-year low and London sugar hitting a new 4.25-year low due to expectations of robust global sugar supplies [2][3] Global Sugar Supply Outlook - BMI Group projects a global sugar surplus of 10.5 million metric tons (MMT) for 2025/26, while Covrig Analytics estimates a surplus of 4.1 MMT for 2025/25 [2] - Brazil's sugar output has increased, with a reported 10.8% year-on-year rise in the second half of September to 3.137 MMT, and cumulative output for 2025-26 through September rising by 0.8% year-on-year to 33.524 MMT [3] Regional Production Factors - India's sugar production is expected to rebound by 19% year-on-year to 34.9 MMT for 2025/26, following a significant decline of 17.5% to 26.2 MMT in 2024/25 [4] - The Indian Meteorological Department reported cumulative monsoon rainfall of 937.2 mm, which is 8% above normal, indicating favorable conditions for sugar crop production [4] Export Dynamics - India may divert 4 MMT of sugar for ethanol production in 2025/26, which could lead to increased exports of up to 4 MMT, surpassing earlier expectations of 2 MMT [5] - Thailand's sugar production is also projected to rise by 5% year-on-year to 10.5 MMT for 2025/26, contributing to bearish market conditions [6]

Price Trends - March NY world sugar 11 closed down -0.19 (-1.20%) and December London ICE white sugar 5 closed down -10.70 (-2.37%) [1] - Sugar prices settled lower but remained above the lows reached the previous day, with NY sugar falling to a 3-week low and London sugar dropping to a 4.25-year nearest-futures low [2] Supply Outlook - The outlook for robust global sugar supplies is weighing on prices, with BMI Group projecting a global 2025/26 sugar surplus of 10.5 million metric tons (MMT) and Covrig Analytics projecting a surplus of 4.1 MMT for 2025/25 [2] - Brazil's sugar output in the first half of September rose by +15.7% year-on-year to 3.622 million tons, contributing to the pressure on sugar prices [3] - Cumulative 2025-26 Center-South sugar output through mid-September fell -0.1% year-on-year to 30.388 MMT [3] Regional Production Factors - India's Meteorological Department reported cumulative monsoon rainfall of 937.2 mm as of September 30, which is 8% above normal, indicating a potential bumper sugar crop [4] - India's National Federation of Cooperative Sugar Factories projected a +19% year-on-year increase in sugar production for 2025/26 to 34.9 MMT, following a -17.5% decline in 2024/25 to a 5-year low of 26.2 MMT [4] Export Dynamics - India may divert 4 MMT of sugar to make ethanol in 2025/26, which may not sufficiently ease the country's sugar surplus and could lead to exports of up to 4 MMT, exceeding earlier expectations of 2 MMT [5]