Core Viewpoint - Sugar prices have increased due to a rally in the Brazilian real, which has led to short covering in sugar futures, while higher production in Brazil and India, along with a projected global sugar surplus, are expected to exert downward pressure on prices. Group 1: Sugar Price Movements - March NY world sugar 11 closed up +0.22 (+1.49%) and March London ICE white sugar 5 closed up +4.80 (+1.14%) [1] - The rally in the Brazilian real to a 2.25-month high against the dollar has prompted short covering in sugar futures, discouraging export sales from Brazil's sugar producers [1] Group 2: Production and Supply Dynamics - Brazil's cumulative 2025-26 Center-South sugar output through December rose by +0.9% year-on-year to 40.222 million metric tons (MMT) [3] - The ratio of cane crushed for sugar in Brazil increased to 50.82% in 2025/26 from 48.16% in 2024/25 [3] - India's sugar output from October 1 to January 15 is up +22% year-on-year to 15.9 MMT, with the total production estimate for 2025/26 raised to 31 MMT, up +18.8% year-on-year [5] - The Indian 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 [6] Group 3: Global Sugar Surplus Outlook - Covrig Analytics raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT, but projects a decline to 1.4 MMT in 2026/27 due to weak prices discouraging production [4] - An excessively long position in London ICE white sugar futures could exacerbate any price decline, with funds boosting their net long positions to a record 48,203 [2]

Core Insights - Sugar prices are declining due to increased sugar production in India and falling crude oil prices [1][2] - Brazil's sugar output forecast has been raised, contributing to bearish market sentiment [3] - The International Sugar Organization (ISO) predicts a significant sugar surplus for 2025-26, driven by production increases in multiple countries [4] Group 1: Indian Sugar Production - The India Sugar Mill Association (ISMA) reported a 28% year-on-year increase in Indian sugar production from October 1 to December 15, totaling 7.8 million metric tons (MMT) [1] - ISMA has raised its 2025/26 sugar production estimate for India to 31 MMT, an 18.8% year-on-year increase, while reducing the estimate for sugar used for ethanol production [5] Group 2: Brazilian Sugar Production - Conab has increased its Brazil 2025/26 sugar production estimate to 45 MMT, up from 44.5 MMT [3] - Brazil's Center-South sugar output in the first half of November rose by 8.7% year-on-year to 983 thousand metric tons (MT) [3] - Cumulative sugar output through mid-November for the 2025-26 season increased by 2.1% year-on-year to 39.179 MMT [3] Group 3: Global Sugar Market Outlook - The ISO forecasts a sugar surplus of 1.625 million MT for 2025-26, reversing a deficit of 2.916 million MT in 2024-25, driven by increased production in India, Thailand, and Pakistan [4] - The global sugar production is expected to rise by 3.2% year-on-year to 181.8 million MT in 2025-26 [4] - Czarnikow has raised its global sugar surplus estimate for 2025/26 to 8.7 MMT, an increase of 1.2 MMT from a previous estimate [4]

Core Viewpoint - Sugar prices are experiencing slight declines as they consolidate losses from earlier in the week, primarily due to increased sugar production in India and a bearish outlook for Brazilian sugar output [2][4]. Group 1: Sugar Production and Market Dynamics - India's sugar production from October to November surged by 43% year-on-year to 4.11 million metric tons (MMT), with 428 sugar mills actively crushing cane as of November 30, compared to 376 the previous year [2]. - Brazil's sugar production forecast for the 2025/26 season has been raised to 45 MMT, with a reported 8.7% year-on-year increase in sugar output in the first half of November [4]. - The International Sugar Organization (ISO) projects a sugar surplus of 1.625 million metric tons for the 2025-26 marketing year, driven by increased production in India, Thailand, and Pakistan [7]. Group 2: Price Influences and Market Sentiment - Recent strength in the Brazilian real has led to short covering in sugar futures, limiting losses in sugar prices despite the bearish production outlook [3]. - Concerns about tighter global sugar supplies had previously driven prices to six-week highs, but recent adjustments in production estimates have shifted market sentiment [5]. - India's food ministry's decision to allow mills to export only 1.5 MMT of sugar in the 2025/26 season, down from earlier estimates, is providing some support to sugar prices [6].