Wednesday in July NY World Sugar # 11 (SBN25) Wednesday closed +0.21 ( + 1.33%), and August London Ice White Sugar # 5 (SWQ25) closed +11.00 ( + 2.35%).
Sugar prices put early losses on Wednesday and increased after a rally of + 1% in the WTI raw oil (CLQ25) triggered a short-covered in term sugar contracts. The higher crude crude prices benefit the prices of ethanol and can encourage global sweets to divert the crushing from cane to ethanol production rather than sugar, thus reducing sugar supply.
Sugar prices have dropped in the past three months, the NY Sugar displaying a lowest duration of 4 years on Wednesday due to the expectations of a global sugar surplus. On May 22, the USDA, in its biannual report, planned that global sugar production in 2025/26 would increase by + 4.7% from one year to the next (Y / Y) to a record of 189.318 million metric tonnes (MMT), with a global sugar surplus of 41.188 MMT, up 7.5% per year.
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 at 5 years of 26.2 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.
