Sugar prices Push Higher as Brazil Sugarcane Yields Decline
Chicago, IL – August 30, 2024 – Sugar futures are edging higher Friday as concerns mount over declining sugarcane yields in Brazil, the world’s largest sugar producer, perhaps tightening global supplies. The shift comes amid conflicting forecasts for the 2025/26 season, with some analysts predicting surpluses while others anticipate continued deficits.
Brazil’s government crop forecasting agency, Conab, recently cut its 2025/26 sugar production estimate by 3.1% to 44.5 million metric tons (MMT) from a prior 45.9 MMT forecast. This reduction follows a 3.4% year-over-year decline in 2024/25 production, which fell to 44.118 MMT, attributed to drought and excessive heat impacting sugarcane yields. The USDA, in its May 22 bi-annual report, projected global 2025/26 sugar production would increase +4.7% y/y to a record 189.318 MMT, but Conab’s downward revision introduces uncertainty into that outlook.
Despite the Brazilian concerns, the International sugar Association (ISO) forecasts a global sugar deficit for the sixth consecutive year in 2025/26, albeit a shrinking one of -231,000 MT, improving from a -4.88 MMT shortfall in 2024/25. The ISO projects global production will rise +3.3% y/y to 180.6 MMT, with consumption increasing +0.3% y/y to 180.8 MMT.
However, other forecasts point to a potential surplus. commodities trader Czarnikow projects a 7.5 MMT global sugar surplus for 2025/26,the largest in eight years. The USDA also forecasts global sugar ending stocks to climb +7.5% y/y to 41.188 MMT.
Thailand, the world’s third-largest sugar producer and second-largest exporter, anticipates a +5% year-over-year increase in its 2025/26 crop to 10.5 MMT, according to the Thai Sugar Miller Corp. Thailand’s 2024/25 production rose +14% y/y to 10.00 MMT, as reported by the Office of the Cane and Sugar Board on May 2. the USDA’s Foreign agricultural Service (FAS) predicts a +25% y/y increase in India’s 2025/26 sugar production to 35.3 MMT, driven by favorable monsoon rains and increased acreage, while forecasting Thailand’s 2025/26 production at +2% y/y to 10.3 MMT.
