July Ny World Sugar #11 (SBN25) today down -0.26 (-1.62%), and August London Ice White Sugar #5 (SWQ25) down -0.80 (-0.174%).
Sugar prices are under pressure today, with NY sugar falling to the nearest 4 years-closest shells low. Today's -5% plumbing in raw prices (CLQ25) weighs at sugar prices. Lower raw prices undermine ethanol prices and can encourage world sugar mills to divert cane grinding towards sugar production rather than ethanol, thereby boosting sugar supplies.
Sugar prices have fallen over the last three months due to the expectations of world -surplus surplus. On May 22, the USDA, in its two-year report, predicted that Global Sugar production 2025/26 would increase +4.7% year-on-year (y/y) to the peak of 189.318 million metric tons (MMT), with a global sugar surplus of 41.188 MMT, up 7.5% year-year-year-old year.
The prospects for higher sugar production in India, the world's second-largest producer, are bearish at prices. On June 2, the National Federation of Sugar India predicted that the 2025/26 India sugar production would climb +19% y/yi 35 MMT, indicating a larger planted cane acre. The prospects for abundant rainfall in India could lead to a bumper sugar crop, which is bearish at prices. On April 15, the Indian Earth Sciences Administration projected above the practice this year, and the total rainfall is forecast to be 105% of the long -term average. The Indian Monsoon season runs from June through September.
Signs of larger world sugar output are negative for prices. On May 22, the USDA foreign agricultural service (shallow) predicted that the Brazilian 2025/26 sugar production would rise +2.3% yi record 44.7 MMT. Also, it is anticipated that sugar production 2025/26 India will rise +25% per 35.3 MMT, indicating favorable monsoon rains and more sugar acres. In addition, Sugar production is expected 2025/26 Thailand climbing +2% per/yi 10.3 MMT.
In a bearish factor, the Indian government on January 20 said it would allow its sugar mills to export 1 MMT of sugar this season, alleviating the restrictions placed on sugar exports in 2023. India has restricted sugar exports since October 2023 to maintain adequate domestic supplies. India allowed Mills to export only 6.1 MMT of sugar during the 2022/23 season up to September 30, after allowing export of 11.1 MMT record in the previous season. However, the ISMA predicts that sugar production 2024/25 India will collapse -17.5% per/yi minimum 5 years from 26.2 MMT. The Isma also reported last Monday that India's sugar production from October 1 -mai 15 was 25.74 MMT, down -17% from the same period last year. In addition, India's Food Secretary Chopra said on May 1 May only 800,000 MT India's sugar exports can 2024/25 a total of 100,000 MT, below earlier expectations of 1 MMT.