On Monday, July NY world sugar #11 (SBN25) closed down -0.06 (-0.37%), while August London ICE white sugar #5 (SWQ25) dropped -7.60 (-1.60%). The decline followed a significant -7% drop in crude oil prices, prompting long liquidation in sugar futures and raising concerns about increased sugar supply as mills may shift focus from ethanol production.
The USDA has projected that global sugar production for 2025/26 will increase by +4.7% year-over-year, reaching a record 189.318 million metric tons (MMT), contributing to expectations of a global sugar surplus of 41.188 MMT. India’s sugar production is projected to rise by +19% y/y to 35 MMT, supported by favorable monsoon conditions. In Brazil, the crop is forecasted to see an increase of +2.3% y/y to 44.7 MMT. However, projections indicate a potential sugar deficit of -5.47 MMT for the 2024/25 season, marking a tightening market in response to adverse weather impacts on yields.
