Sugar crystals under magnification by panic_attack via ISTOCK
October NY World Sugar # 11 (SBV25) closed on Tuesday down -0.15 (-0.92%) and August London Ice White Sugar # 5 (SWQ25) closed below -0.90 (-0.19%).
Sugar prices have been down on Tuesday and were under pressure in the last two sessions following the elimination of the risk of frovy of weather forecasts in Brazil. Tuesday’s rally in the dollar index (DXY00) at a 1.5 week summit also weighed on sugar prices.
The early arrival of the monsoon season in India has strengthened the prospects of a bumper sugar harvest and is a negative factor for sugar prices. On Monday, the Meteorological Department of India said that precipitation in June was 9% above normal in India and planned rains greater than normal for July.
Sugar prices have dropped in the past three months due to the expectations of a global sugar surplus. Last Wednesday, October NY Sugar posted a hollow of the contract, and last Monday, the July Sugar contract posted a hollow of 4.25 years on the graph of the nearest future. Last Wednesday, August, London Sugar posted a level of future closest future. Last Monday, the merchant of the raw materials Czarnikow projected a surplus of global sugar of 7.5 mmt for the 2025/26 season, the largest surplus in 8 years. On May 22, the USDA, in its biannual report, planned that global sugar production in 2025/26 would increase by + 4.7% in Y / Y to a record of 189.318 million metric tonnes (MMT), with global sugar actions finishing at 41.188 MMT, up 7.5% annual.
The prospects for the higher sugar production in India, the second world producer, are lower for prices. On June 2, the National Indian Federation of Cooperative Sugar factories provided that the production of sugar in 2025/26 of India would climb + 19% in year at 35 mmt, citing a larger planted cane area. The prospects for abundant precipitation in India could lead to an exceptional sugar harvest, which is lower for prices. On April 15, the Indian Ministry of Earth Sciences projected a monsoon greater than normal this year, total precipitation providing for 105% of the long -term average. The India monsoon season takes place from June to September.
Signs of larger production of global sugar are negative for prices. On May 22, the USDA foreign agricultural service (FAS) predicted that the production of sugar in 2025/26 of Brazil would increase + 2.3% in y / y to a record of 44.7 mmt. In addition, the production of sugar in 2025/26 of India should increase by + 25% in year to 35.3 mmt, citing favorable monsoon rains and an increase in sugar area. In addition, the production of sugar in 2025/26 in Thailand should climb + 2% in annual sliding to 10.3 mmt.
In a lowering factor, the Indian government said on January 20 that it allowed its sweets to export 1 mmt of sugar this season, which facilitates the restrictions imposed on sugar exports in 2023. India has restricted sugar exports since October 2023 to maintain adequate interior supplies. India allowed Mills to export only 6.1 mmt of sugar during the 2022/23 season until September 30, after having authorized the exports of an 11.1 mmt record the previous season. However, the ISMA provides that the production of sugar in 2024/25 of India will decrease by -17.5% in Y / Y to a minimum of 5.2 mmt. In addition, ISMA reported last Monday that sugar production in India from October 1 -May 15 at 15.74 mmt, down -17% compared to the same period last year. In addition, the secretary of the Indian Food Chopra said on May 1 that the sugar exports in 2024/25 of India could total only 800,000 Mt, below the anterior expectations of 1 mmt.
The prospects for higher sugar production in Thailand are lower for sugar prices. On May 2, the office of Thailand of the Cane and Sugar Commission indicated that the production of sugar in 2024/25 in Thailand increased by + 14% in annual sliding to 10.00 mmt. Thailand is the third world sugar producer and the second largest sugar exporter.
Sugar prices have some support for reducing sugar production in Brazil. UNICA reported on Monday that the cumulative production of central sugar from Brazil -south in Brazil in the middle of June is down -14.6% in year to 9.404 mmt. Last month, CONAB, the government agency for forecasting Brazil cultures, said that the production of Brazilian sugar 2024/25 fell from -3.4% in annual sliding to 44.118 MMT, citing lower sugar cane yields due to drought and excessive heat.
The International Sugar Organization (ISO) has increased its forecasts for 2024/25 global sugar deficit at a high -5.47 mmt summit at 9 years on May 15, against a February forecast of -4.88 mmt. This indicates a tightening market after excess global sugar 2023/24 of 1.31 mmt. ISO has also reduced its global sugar production forecasts 2024/25 to 174.8 mmt compared to a February 175.5 mmt forecast.
The USDA, in its bi-annual report published on May 22, has planned that global sugar production 2025/26 would increase + 4.7% in Y/Y to a record of 189.318 mmt and that global consumption of human sugar 2025/26 would increase + 1.4% in year to a record of 177.921 MMT. The USDA also provided that global sugar stocks in 2025/26 would increase + 7.5% in annual sliding at 41.188 mmt.
On the date of publication, Rich Asplund did not (directly or indirectly) have positions in any of the titles mentioned in this article. All information and data of this article are only for information purposes. This article was initially published on Barchart.com
