July NY world sugar #11 (SBN25) at the moment is down -0.38 (-2.38%), and August London ICE white sugar #5 (SWQ25) is down -0.80 (-0.17%).
Sugar costs at the moment prolonged their three-month-long selloff, with NY sugar dropping to a 4-year nearest-futures low. Sugar costs have been underneath stress over the previous three months because of expectations of a world sugar surplus. On Might 22, the USDA, in its biannual report, projected that world 2025/26 sugar manufacturing would enhance by +4.7% y/y to a document 189.318 million metric tons (MMT), with a world sugar surplus of 41.188 MMT, up 7.5% year-over-year.
The outlook for increased sugar manufacturing in India, the world’s second-largest producer, is bearish for costs. On June 2, India’s Nationwide Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar manufacturing would climb +19% y/y to 35 MMT, citing bigger planted cane acreage. The outlook for plentiful rainfall in India might result in a bumper sugar crop, which is bearish for costs. On April 15, India’s Ministry of Earth Sciences projected an above-normal monsoon this yr, with whole rainfall forecast to be 105% of the long-term common. India’s monsoon season runs from June by means of September.
Indicators of bigger world sugar output are destructive for costs. On Might 22, the USDA’s Overseas Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a document 44.7 MMT. Additionally, India’s 2025/26 sugar manufacturing is projected to rise +25% y/y to 35.3 MMT, citing favorable monsoon rains and elevated sugar acreage. As well as, Thailand’s 2025/26 sugar manufacturing is predicted to climb +2% y/y to 10.3 MMT.
In a bearish issue, the Indian authorities stated on January 20 that it might permit its sugar mills to export 1 MMT of sugar this season, easing the restrictions positioned on sugar exports in 2023. India has restricted sugar exports since October 2023 to keep up sufficient home provides. India allowed mills to export solely 6.1 MMT of sugar through the 2022/23 season to September 30, after permitting exports of a document 11.1 MMT within the earlier season. Nonetheless, the ISMA initiatives that India’s 2024/25 sugar manufacturing will fall -17.5% y/y to a 5-year low of 26.2 MMT. Additionally, the ISMA reported final Monday that India’s sugar manufacturing from Oct 1-Might 15 was 25.74 MMT, down -17% from the identical interval final yr. As well as, Indian Meals Secretary Chopra stated on Might 1 that India’s 2024/25 sugar exports could solely whole 800,000 MT, under earlier expectations of 1 MMT.
