Thank you for reading this post, don't forget to subscribe!
Sugar cane rising in Hawaii by Derrick Miller by way of Pixabay
October NY world sugar #11 (SBV25) Monday closed down -0.10 (-0.61%), and August London ICE white sugar #5 (SWQ25) closed down -4.10 (-0.85%).
Sugar costs had been below stress Monday following the removing of the frost threat from climate forecasts in Brazil. Additionally, an early arrival of the monsoon season in India has bolstered the outlook for a bumper sugar crop. Rains in June had been 9% above regular in India, and the India Meteorological Division has forecast above-normal rainfall for July.
Sugar costs have plummeted over the previous three months as a result of expectations of a worldwide sugar surplus. Final Wednesday, October NY sugar posted a contract low, and final Monday, the July NY sugar contract posted a 4.25-year low on the nearest-futures chart. Final Wednesday, Aug London sugar posted a 3.75-year nearest-futures low. Final Monday, commodities dealer Czarnikow projected a 7.5 MMT international sugar surplus for the 2025/26 season, the most important surplus in 8 years. On Could 22, the USDA, in its biannual report, projected that international 2025/26 sugar manufacturing would improve by +4.7% y/y to a report 189.318 million metric tons (MMT), with international sugar ending shares at 41.188 MMT, up 7.5% year-over-year.
The outlook for larger 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 may 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 12 months, with whole rainfall forecast to be 105% of the long-term common. India’s monsoon season runs from June by September.
Indicators of bigger international sugar output are destructive for costs. On Could 22, the USDA’s International Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a report 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 anticipated to climb +2% y/y to 10.3 MMT.
In a bearish issue, the Indian authorities mentioned on January 20 that it might enable 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 take care of ample home provides. India allowed mills to export solely 6.1 MMT of sugar throughout the 2022/23 season to September 30, after permitting exports of a report 11.1 MMT within the earlier season. Nonetheless, the ISMA tasks 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-Could 15 was 25.74 MMT, down -17% from the identical interval final 12 months. As well as, Indian Meals Secretary Chopra mentioned on Could 1 that India’s 2024/25 sugar exports could solely whole 800,000 MT, beneath earlier expectations of 1 MMT.
The outlook for larger sugar manufacturing in Thailand is bearish for sugar costs. On Could 2, Thailand’s Workplace of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar manufacturing rose +14% y/y to 10.00 MMT. Thailand is the world’s third-largest sugar producer and the second-largest exporter of sugar.
Sugar costs have some help from lowered sugar manufacturing in Brazil. Unica reported Monday that the cumulative 2025/26 Brazil Middle-South sugar output by mid-June is down by -14.6% y/y to 9.404 MMT. Final month, Conab, Brazil’s authorities crop forecasting company, mentioned 2024/25 Brazil sugar manufacturing fell by -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields as a result of drought and extreme warmth.
The Worldwide Sugar Group (ISO) raised its 2024/25 international sugar deficit forecast to a 9-year excessive of -5.47 MMT on Could 15, up from a February forecast of -4.88 MMT. This means a tightening market following the 2023/24 international sugar surplus of 1.31 MMT. ISO additionally lower its 2024/25 international sugar manufacturing forecast to 174.8 MMT from a February forecast of 175.5 MMT.
The USDA, in its bi-annual report launched Could 22, projected that international 2025/26 sugar manufacturing would climb +4.7% y/y to a report 189.318 MMT and that international 2025/26 human sugar consumption would improve +1.4% y/y to a report 177.921 MMT. The USDA additionally forecasted that 2025/26 international sugar ending shares would climb +7.5% y/y to 41.188 MMT.
On the date of publication, Wealthy Asplund didn’t have (both instantly or not directly) positions in any of the securities talked about on this article. All info and knowledge on this article is solely for informational functions. This text was initially printed on Barchart.com
