October NY world sugar #11 (SBV25) today is down -0.13 (-0.79%), and October London ICE white sugar #5 (SWV25) is down -2.00 (-0.42%).
Sugar prices today are weaker and fell to 1-week lows. The outlook for Brazil's sugar mills to boost sugar production at the expense of ethanol output is weighing on sugar prices. Covrig Analytics said today that Brazil's sugar mills are favoring sugar production over ethanol and have been crushing more cane for sugar, and that will likely continue as harvesting approaches its peak due to drier cane crops, which prompt the mills to make more sugar.
NY sugar rallied to a 2-month high last Tuesday on concerns over weaker cane yields in Brazil. Last Friday, Unica reported that Brazil's Center-South sugar output in the second half of July fell by -0.8% y/y to 3,614 MT, and the 2025-26 Center-South sugar output through July fell -7.8% y/y to 19,268 MT. The percentage of sugarcane crushed for sugar by Brazil's sugar mills in the second half of July increased to 54.10% from 50.32% the same time last year. Also, Conab, Brazil's government crop forecasting agency, said last month that 2024/25 Brazil sugar production fell by -3.4% y/y to 44.118 MMT, citing lower sugarcane yields due to drought and excessive heat.
The outlook for higher sugar exports from India is negative for sugar prices after Bloomberg reported that India may permit local sugar mills to export sugar in the next season, which starts in October, as abundant monsoon rains may produce a bumper sugar crop. India's Meteorological Department reported today that cumulative monsoon rain in India was 611.2 mm as of August 18, or 1% above normal. Also, the Indian Sugar and Bio-energy Manufacturers Association recently said that it will seek permission to export 2 MMT of sugar in 2025/26.
The outlook for higher sugar production in India, the world's second-largest producer, is bearish for prices. On June 2, India's National Federation of Cooperative Sugar Factories projected that India's 2025/26 sugar production would climb +19% y/y to 35 MMT, citing larger planted cane acreage. That would follow a -17.5% y/y decline in India's sugar production in 2024/25 to a 5-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).
