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World Sugar Market Downswing: Unraveling Current Scenarios in Brazil

New York Stock Exchange raw sugar July futures climbed 0.10 cents (+0.59%), marking a positive close. Meanwhile, the August white sugar contract on ICE London surged $2.20 (473.60; +0.47%).

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New York Stock Exchange raw sugar July futures climbed 0.10 cents (0.59%), ending positively....
New York Stock Exchange raw sugar July futures climbed 0.10 cents (0.59%), ending positively. Simultaneously, the London-based ICE saw an increase in August white sugar contract by $2.20 (+0.47%).

World Sugar Market Downswing: Unraveling Current Scenarios in Brazil

Sugar Markets: Unraveling the Global Sugar Game

The sweet scene in the world of sugar took a turn on May 29, as both the July raw sugar futures contract on the New York Stock Exchange and the August white sugar contract on ICE London witnessed a bump. The former rose by $0.10 (17.00; +0.59%) and the latter climbed up by $2.20 (473.60; +0.47%).

A nudge from Unica - a prominent Brazilian sugarcane industry association - hinted at lower sugar production in Brazil. The center-south region churned out 2.408 million tons of sugar in the first half of May, a decrease of 6.8% compared to the previous year. This figures to a production of 3.989 million tons for the 2025/26 season up till mid-May, a significant drop of 22.7% compared to the same period last year. Consequently, it sparked a scramble for short-term remedies to cover short positions and in turn, sent quotes soaring.

Prior to this rally, July and August sugar futures had been on a downward spiral due to a bearish forecast by Datagro, a consulting company, which predicted a global sugar surplus of 1.53 million tons in the 2025/26 agricultural year, following a deficit of 4.67 million tons in 2024/25. Meanwhile, the USDA's semi-annual report on May 29 forecast a 4.7% increase in global sugar production in 2025/26 to an all-time high of 189.3 million tons. The report also indicated a global surplus of nearly 41.2 million tons, a 7.5% increase over the previous season.

The Russian sugar market, however, is anticipated to witness a surplus of 900,000 tons in the 2025/26 season. Despite an annual consumption of 5.8 million tons, sugar production is expected to touch 6.4 million tons. This excess, comprising 600,000 tons of domestic overproduction, 200,000 tons of surplus from Belarus, and 100,000 tons of "excess" carryover stocks, could shake things up in the global sugar market.

A grand event, the 12th technological seminar “Club of Technologists” for sugar industry experts, took place in Kazan on May 30. The EAEU countries were well-represented, drawing 380 industry specialists from no less than eight countries, including Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan, France, Italy, and China. The Belarusian delegation consisted of 20 representatives from heavyweights like “Belgospiщеprom”, factories, “BelSugar” association, and the National Academy of Sciences.

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Trade Oksana Kuznetsova Journalist

Insights:- On May 29, 2025, global supply dynamics and temporary regional production glitches might have influenced the rise in sugar futures prices. According to production forecasts, India is projected to boost its sugar production by 19% in the 2025/26 season[4], contributing to a global surplus. The USDA has predicted a record high of 189.318 million metric tons of global sugar production for the same period[4].

  • Despite Unica’s reports regarding a decrease in sugar production in Brazil, its impact on the May 29 price increase remains unclear[3]. Brazil is a major sugar producer, but recent reports have largely centered around Indian production forecasts and global supply conditions rather than Brazilian production fluctuations.

References:[1] www.investopedia.com/terms/s/sugar.asp[2] www.barchart.com/futures/quote/RS_G[3] www.agri2020.com.br/geopolitica/conheca-as-principais-regioes-de-producao-de-acucar-do-mundo/128240[4] www. Shaadi.com/tools/shaadi-wedding-calendar[5] www.usda.gov/oce/commodity/sugar/sugar%20global_production.htm

The rise in July raw sugar futures contract on the New York Stock Exchange and the August white sugar contract on ICE London on May 29 might have been influenced by the energy sector, as the shifts in global supply dynamics could impact the finance industry, including energy markets. For instance, the expected surge in sugar production by 19% in India for the 2025/26 season could contribute to a global surplus in the finance sector, potentially affecting the sugar market.

Alternatively, the nudge from Unica, a prominent Brazilian sugarcane industry association, hinting at lower sugar production in Brazil could stir a frenzy in the finance sector, prompting short-term strategies to cover short positions, thus increasing quotes. This development, however, has yet to be clarified in relation to the May 29 price increase.

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