Stronger demand for sugar from Pakistan increases sugar prices

October NY World Sugar #11 (SBV25) today is up +0.10 ( +0.62%), and October London ice white sugar #5 (SWV25) is up +4,00 ( +0.86%).

Sugar prices are increasing today as the short coverage has appeared after the messages are said to be that Pakistan is striving to buy 100,000 MT sugar this week after purchasing a similar amount last week. Pakistan increases sugar imports in an attempt to stabilize domestic prices.

Last Friday, NY Sugar slid to a 1.5-week low, and London sugar fell to a 4-week low level of signs of stronger sugar production in Brazil. Last Thursday, Unica reported the production of sugar in the center of Brazil in the first half of July increased by +15% Y/Y to 3.4 mmt. Also, the amount of sugar cane, crushed for sugar from the sugar mills of Brazil, increased to 54% of 50% in the same way last year.

Forecasts for higher sugar production in Brazil are a bear for sugar prices. Datagro said last Monday, that dry weather in Brazil had encouraged the country’s sugar mills to increase their stripping on a cane, diverting more than crushing a cane to a more baked sugar production rather than ethanol.

Forecasts for higher sugar export from India are negative for prices after Bloomberg has announced that India can allow local sugar mills to export sugar next season, which begins in October as abundant monsoon rains can produce sugar crop. The India Meteorological Department announced today that cumulative monsoon rain in India is 500.8 mm, or 4% above normal as of August 4. Also, the Association of Producers of India’s sugar and bioenergy said last Thursday would seek permission to export 2 mmt sugar in 2025/26.

Forecasts for higher sugar production in India, the world’s second largest producer, is a pricing bear. On June 2, the National Federation of Cooperative Sugar Factory in India predicts that the production of sugar from 2025/26 in India will rise +19% of the years per year/up to 35 mmt, referring to larger planted reed area. This would follow a decline -17.5% Y/Y in the production of sugar in India in 2024/25 to 5 -year at least 26.2 mmt, according to the Indian Sugar Mill (ISMA).

Sugar prices have withdrawn in the last four months, with NY sugar fell to 4.25 years last month, and London sugar slides to a 4-year minimum, driven by expectations for excess sugar in the 2025/26 season. On June 30, the merchant of goods Czarnikow predicts a 7.5 mmt Global Sugar surplus for the 2025/26 season, the largest surplus of 8 years. On May 22, USDA, in its two -year report, predicts that global sugar production 2025/26 will increase by +4.7% Y/Y to a record 189,318 mmt, with global sugar stocks at 41.188 mmt, up to 7.5% Y/Y.