So, will Brazil CS harvest more or less cane than last year? Estimates range from 590 / 620 mln m/t with most at around 600 mln m/t. The Agri yields in March and April 25 were lower than last year and it seems it will be the case at least until July or even Aug. Given the rainfall improved, the cane that will be harvested from Aug or Sept to Dec will likely be better than last year. At this stage, based on a small sample and better rainfall, we estimate the Brazil CS cane harvest from 592 to 605 mln m/t. Brazil CS cane harvest in 24/25 was 622 mln m/t.
Ethanol prices in Brazil are lower than Sugar still i.e. around 14sh cts for Hydrous and 16sh cts for Anhydrous while Sugar nr 11 is around 16sh cts/lb.
Brazilian cane Millers will still do all they can to produce more Sugar vs. Ethanol, which has been the case since mid 2022. Mills have a daily limit on how much they can produce therefore, the slower the harvest (which will be the case this year) the higher the percentage that can be allocated towards Sugar.
Brazil CS Sugar Mix was 47.77% in 24/25 (fast harvest) down from 48,59% in 23/24 and is expected to rise to 50/51% this year, so Millers need to make a strong effort to end higher this year. Last but not least, the total acreage for Cane in the CS increased 6,25% in 24/25 and at best is expected to be similar this year.
So, assuming similar area (at best) lower Cane (average -4%) lower ATR (min -1,3% perhaps -1,8%) and higher Sugar Mix by 2,82% (max) the Braz CS sugar production would be at 40,3 mln m/t, so extremely similar to last year, which was 40,2 mln m/t.
Brazil exported 5,27 mln m/t less sugars during Nov 24/May 25, but exports from May/June 25 are improving! World sugar demand for Brazil dropped from Nov 24, which enabled Brazil not to run out of Sugars by Feb/March 25. The Carry over was less than 1,2 mln m/t by end of April 25.
BRAZIL SUGAR STOCKS FOR END OF MAY 25 WERE ESTIMATED AT 2,8 MLN M/T, DOWN 2 MLN M/T YOY. GIVEN THE STRONGER SUGAR PRODUCTION BY NORTH/NORTHEAST, BUT DUE TO THE STRONGER EXPORTS, BRAZIL SUGAR STOCKS WERE PRETTY MUCH ALL IN THE SOUTH.
So, a quick reminder that Brazil is starting with 2,5 mln m/t less stocks (end of April 25) and may have a smilar sugar production. Demand during May 25 through April 26 should improve. That’s the constructive point for Producers.
The White Premium is weaker, so demand by tolling Refineries (Raws in Refined out) may take time to get much stronger again.
India is expected to produce 4 to 6 mln m/t more sugars from Nov 25, but will need to get approval from the Gov to allow exports (1 to 3 mln m/t surplus) and Thailand is expected to produce 500k to 1 mln m/t more sugars from Dec 25. Central America is expected to have similar crops from Nov 25. Australia may produce 100/200k m/t more sugars from June 25.
EU is expected to produce 500k m/t less sugar and export less, but Russia/ Ukraine are expected to have a similar nett exports from Sept 25 (Russia better sugar production, but lower carry over) and Pakistan is not expected to export any sugars.
Overall the expected 25/26 small surplus is so far on Raws and we need to watch what India may or may not do.
Sugar consumption is the great “uncertainty”, but despite some may dispute whether demand has gone down, stayed steady or rose a bit, the difference would be small anyway.
One point to take into consideration is that stocks at Producing countries are lower and are at very low levels in Brazil and India and not high in other places. Stocks at Importing Nations are unlikely higher given the lower imports. Are most under estimating demand?
“Specs” in sugar were short i.e. Funds and Specs around 4 mln m/t by the 3rd of June and likely shorter by the 10th! The nett Spec short position is being caused by larger Gross Shorts by Funds. Specs and Index Funds likely reduced some Gross Longs and possibly increased some Gross Shorts.
Consumers are taking advantage of lower prices and remain “nibbling” on a scale down basis while producers are mostly on “stand by” waiting for a bounce, but some are pricing into 2026.
We see producers priced around 70% for 2025, perhaps a touch more and Consumers unpriced by about 40%. Looking ahead, into 2026, we see producers priced max 25% and 3% for 2027.
In terms of price, if we put the current S&D scenario on the front line and the current uncertain Macro, higher Oil production (now higher prices due to the Middle East issues) and a weaker Dollar so far, one may say that Sugar prices may continue under some pressure, but perhaps most damage has taken place.
Alberto Peixoto E:
albertopeixoto@apcommodities.london T: +44(0) 7570 714 981
9 | ADMISI - The Ghost In The Machine | Q2 Edition 2025
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