Report Information - Report Date: June 23, 2025 [1] - Report Title: 2025 Sugar Futures Semi - annual Market Outlook - Fulfilling Weak Expectations [2] - Analyst: Zhou Xiaoqiu, Investment Consulting Qualification Number: Z00001891 [3] Report Industry Investment Rating No relevant content provided. Core Viewpoints - In the second half of 2025, the price of New York raw sugar is expected to be weak, with a focus on Brazil's production and India's exports. Domestic sugar production will change little, production costs will rise slightly, and the total import volume and structure are crucial. The market will trade around the policy expectations of regular imports and substitute imports. The expected price range of Guangxi white sugar spot in the second half of 2025 is 5,600 - 6,100 yuan/ton [3][41] Content Summaries by Section 2025 H1 Sugar Futures Trend Review - The sugar futures showed a trend of rising first and then falling. From January to March, the domestic sugar market was led by New York raw sugar and futures led spot prices, with an overall upward trend. Starting from April, the New York raw sugar price dropped significantly from its high, dragging down domestic prices. From mid - May, the out - of - quota import cost fell below the spot price, suppressing the futures price. In H1 2025, the domestic market was in a positive basis state. The out - of - quota import cost fluctuated between 5,700 - 7,300 yuan/ton, the futures index between 5,700 - 6,200 yuan/ton, and the white sugar spot (Nanning) between 6,000 - 6,250 yuan/ton. The linked white sugar sales price for Guangxi sugarcane in the 24/25 crush season was 6,300 yuan/ton [6] - **First Stage (January - March 2025)**: India's unexpected production cut and low precipitation in Brazil led to a surge in New York raw sugar prices. NFCSF successively revised down India's sugar production estimates. In Q1 2025, precipitation in São Paulo, Brazil's main sugarcane - producing area, was low [9] - **Second Stage (April - June 2025)**: A sharp drop in crude oil prices and accelerated crushing in Brazil caused the New York raw sugar price to fall from its high. In April 2024, the US imposed reciprocal tariffs globally, raising recession expectations and causing a sharp drop in crude oil prices. Brazil's 25/26 crush season started, with an accelerating crushing progress and a significant increase in MIX [9] 2025 H2 Sugar Futures Outlook: Fulfilling Weak Expectations International Market: Key Focus on Brazil and India's Production - **Supply Shift from Shortage to Surplus**: The 24/25 crush season had a global sugar supply shortage, with different institutions estimating shortages ranging from 467 - 700 million tons. The 25/26 crush season is expected to have a supply surplus, with estimates of surplus ranging from 40 - 1,140 million tons [10] - **Brazil's Production Recovery**: In the 24/25 crush season, Brazil's sugar production decreased due to drought. UNICA and Conab data showed declines in cane crushing volume, MIX, and sugar production. In the 25/26 crush season, Conab expects an increase in sugar production due to a higher MIX, reaching a record high [14] - **India's Production Recovery**: In the 24/25 crush season, India's sugar production fell more than expected. NFCSF's estimates were continuously revised downwards. In the 25/26 crush season, favorable factors such as high monsoon precipitation in 2024 and rising cane purchase prices are expected to lead to a significant increase in production [18] - **Thailand's Production Increase and EU's Production Decrease**: In the 25/26 crush season, Thailand's sugar production is expected to increase due to the recovery of cane production and higher purchase prices. The EU's sugar production is expected to decline due to lower planting returns and drought, which is beneficial for widening the raw - refined sugar price spread [22][23] Domestic Market: Key Focus on Import Volume and Structure - **Production Increase but Persistent Supply Gap**: In the 24/25 crush season, China's sugar production increased, but import volume and rhythm were key factors. The control of syrup and premix imports tightened in 2025, resulting in lower - than - expected imports. In the 25/26 crush season, production is expected to remain high, and inventory accumulation is likely due to a significant drop in out - of - quota import costs [26] - **Likely Increase in Domestic Sugar Production Costs**: In the 24/25 crush season, Guangxi's sugar production cost decreased. In the 25/26 crush season, assuming the same cane purchase price, different scenarios of production rate changes are likely to lead to an increase in production costs [30] - **Low Industrial Inventory**: As of the end of May 2025, China's sugar industrial inventory was low. The cumulative sales rate was 72.69%, and the industrial inventory was 305 million tons, lower than the average level since the 15/16 crush season [33] - **Filling Method of Supply Gap Determines Pricing Anchor**: In the 24/25 crush season, the domestic sugar supply shortage was estimated at 465 million tons, and the filling method (substitutes, imports) determines the pricing anchor [37] Conclusion and Investment Outlook - **Conclusion**: Internationally, weak expectations are being fulfilled, and the New York raw sugar price is under pressure. Domestically, the total import volume and structure remain the core of trading. In the 24/25 crush season, despite increased production, low industrial inventory and strong spot prices led to a shift in the pricing anchor. In the 25/26 crush season, if imports remain the same, the supply will still be tight, and pricing will continue to be anchored to out - of - quota import costs [40] - **Investment Outlook**: In the second half of 2025, the New York raw sugar price is expected to be weak, with a focus on Brazil's production and India's exports. Domestic production will change little, production costs will rise slightly, and the total import volume and structure are crucial. The market will trade around import policy expectations, and the expected price range of Guangxi white sugar spot is 5,600 - 6,100 yuan/ton [41]