Onome Amuge
Sugar prices climbed into bullish territory on Monday, snapping a months-long decline and reaching their highest level in nearly seven weeks, as weaker sugar yields from Brazil’s key producing region revived supply concerns in an otherwise oversupplied global market.
March New York raw sugar futures rose 2.06 per cent to close at 16.84 cents per pound, the highest since mid-August, while December London white sugar gained 1.51 per cent to finish at $464.10 per tonne. The rally extended momentum from late last week, when data from Brazil’s sugar industry group Unica signalled a dip in sucrose concentration in the country’s sugarcane crop.
According to Unica, the average sugar content in Brazil’s Centre-South region — which accounts for roughly 90 per cent of national output, fell to 154.58 kilogrammes per tonne of cane in the first half of September, compared with 160.07 kg a year earlier. The decline has raised concern that the world’s largest sugar producer may not deliver as much refined output as previously projected, even though overall crush volumes remain high.
Unica’s latest report showed Centre-South mills produced 3.62 million tonnes of sugar in the first half of September, up 15.7 per cent year-on-year, as operators continued to prioritise sugar over ethanol amid favourable global prices. The proportion of cane allocated to sugar rose to 53.49 per cent, compared with 47.74 per cent a year earlier. Yet cumulative production for the season slipped 0.1 per cent to 30.39 million tonnes.
The bounce in futures came after both New York and London contracts hit multi-year lows in September, pressured by forecasts of rising output from top producers and a projected swing from deficit to surplus in global supply. Analysts at StoneX estimate a 2.8 million tonne sugar surplus in the 2025/26 season, reversing the 4.7 million tonne deficit recorded this year.
Beyond Brazil, prospects for larger crops in Asia continue to weigh on sentiment. India, the world’s second-largest producer, is expected to see a strong rebound in output following a robust monsoon season.
The National Federation of Cooperative Sugar Factories has projected India’s 2025/26 sugar output to rise 19 per cent to 34.9 million tonnes, following a steep 17.5 per cent contraction in the previous cycle to a five-year low of 26.2 million tonnes. With the improved outlook, traders anticipate the government could permit exports of as much as 4 million tonnes next season.
However, Sucden, a major global sugar trader, noted that India’s ethanol blending programme would divert around 4 million tonnes of cane towards biofuel production, a move that may limit export growth but not enough to significantly tighten global supply.
Thailand, another major supplier, is also expected to boost its output. The Thai Sugar Miller Corporation forecast that the country’s 2025/26 crop will increase by 5 per cent to 10.5 million tonnes, building on last year’s 14 per cent rise. The expansion reflects favourable rainfall and a recovery in planted cane acreage after droughts in prior seasons.
Despite these bearish structural factors, short-term positioning among speculative funds has turned more balanced after months of aggressive selling. Traders say renewed buying interest emerged after prices tested technical support levels in late September.
