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On Tuesday, October NY world sugar #11 closed up +0.41 (+2.69%) and December London ICE white sugar #5 was up +11.80 (+2.62%) following a +1% rally in crude oil prices, which incited short covering in sugar futures. An increase in crude oil benefits ethanol prices, possibly leading global sugar mills to prioritize ethanol production over sugar, potentially limiting sugar supply.
Despite this increase, sugar prices have been on a downward trend, with NY sugar hitting a 4.25-year low and London sugar reaching a 4-year low. StoneX forecasts a global sugar surplus of +2.8 million metric tons (MMT) for the 2025/26 season, a stark shift from a deficit of -4.7 MMT in 2024/25. Brazil’s sugar output rose by +18% year-on-year in late August, while India is expected to divert 4 MMT of sugar to ethanol production.
The USDA projects that global sugar production will rise by +4.7% year-on-year to reach a record 189.318 MMT for 2025/26, with consumption increasing by +1.4% to a record 177.921 MMT. Meanwhile, the International Sugar Organization forecasts a global sugar deficit of -231,000 MT for 2025/26, significantly improving from a -4.88 MMT shortfall in 2024/25.
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