Sugar Continues to see Weakness on Outlook for Abundant Global Supplies

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The FREE Barchart Brief newsletter keeps you in the know. Sign up now!Higher sugar output in Brazil is negative for prices.  Last Wednesday, Unica reported that Brazil's Center-South sugar output in the second half of August rose by +18% y/y to 3.872 MT.  Also, the percentage of sugarcane crushed for sugar by Brazil's sugar mills in the second half of August increased to 54.20% from 48.78% the same time last year.  However, cumulative 2025-26 Center-South sugar output through August fell -1.9% y/y to 26.758 MMT.Another bearish factor for sugar was last Tuesday's assertion from sugar trader Sucden that India may divert 4 MMT of sugar to make ethanol in 2025/26, which is not enough to ease the country's sugar surplus and may prompt India's sugar mills to export as much as 4 MMT of sugar, above earlier expectations of 2 MMT.  India is the world's second-largest sugar producer.On August 29, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficits.  The ISO projects a global 2025/26 sugar deficit of -231,000 MT, improving from a -4.88 MMT shortfall in 2024/25.  The ISO also projects 2025/26 global sugar production will rise by +3.3% y/y to 180.6 MMT, and 2025/26 global sugar consumption will increase +0.3% y/y to 180.8 MMT.Expectations for abundant sugar supplies are bearish for prices.  On June 30, commodities trader Czarnikow projected a 7.5 MMT global sugar surplus for the 2025/26 season, the largest surplus in 8 years.  On May 22, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% y/y to a record 189.318 MMT, with global sugar ending stocks at 41.188 MMT, up 7.5% y/y.The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop.  India's Meteorological Department reported on Monday that the cumulative monsoon rain in India as of September 22 was 893.8 mm, or 7% above normal. 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