October NY world sugar #11 (SBV25) on Tuesday closed up +0.21 (+1.34%), and October London ICE white sugar #5 (SWV25) closed up +3.60 (+0.75%).
Sugar costs settled larger Tuesday after a virtually +1% rally in WTI crude oil (CLV25) sparked quick masking in sugar futures. Stronger crude costs profit ethanol costs and should immediate world sugar mills to divert extra cane crushing towards ethanol manufacturing somewhat than sugar, thus decreasing sugar provides.
On Monday, NY sugar tumbled to a 4.25-year nearest-futures low, and London sugar fell to a 2.5-week low because of the outlook for larger sugar manufacturing in Brazil. On August 29, Unica reported that Brazil’s Heart-South sugar output within the first half of August rose by +16% y/y to three,615 MT. Additionally, the share of sugarcane crushed for sugar by Brazil’s sugar mills within the first half of August elevated to 55.00% from 49.15% the identical time final 12 months. Nonetheless, cumulative 2025-26 Heart-South sugar output by mid-August is down -4.7% y/y to 22.886 MMT.
Covrig Analytics not too long ago reported that Brazil’s sugar mills are prioritizing sugar manufacturing over ethanol, crushing extra cane for sugar. This development is anticipated to proceed as harvesting peaks, pushed by drier cane crops that immediate mills to provide extra sugar.
On August 9, London sugar rose to a 3.75-month excessive after the Worldwide Sugar Group (ISO) forecast a world sugar deficit for the 2025/26 season, the sixth consecutive 12 months of sugar deficits. The ISO initiatives a world 2025/26 sugar deficit of -231,000 MT, bettering from a -4.88 MMT shortfall in 2024/25. The ISO additionally initiatives 2025/26 world sugar manufacturing will rise by +3.3% y/y to 180.6 MMT, and 2025/26 world sugar consumption will enhance +0.3% y/y to 180.8 MMT.
On August 19, Conab, Brazil’s authorities crop forecasting company, lower its Brazil 2025/26 manufacturing estimate by 3.1% to 44.5 MMT from a earlier estimate of 45.9 MMT. In July, Conab reported that 2024/25 Brazil sugar manufacturing fell by -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields because of drought and extreme warmth.
Expectations for plentiful sugar provides are undercutting sugar costs. On June 30, commodities dealer Czarnikow projected a 7.5 MMT world sugar surplus for the 2025/26 season, the most important surplus in 8 years. On Could 22, the USDA, in its biannual report, projected that world 2025/26 sugar manufacturing would enhance by +4.7% y/y to a file 189.318 MMT, with world sugar ending shares at 41.188 MMT, up 7.5% y/y.
