The Pakistan coming Cane crop should be better than the domestic needs and the carry over may allow Pakistan to avoid having to import sugars again. Will the domestic market “force” the hand of the Gov again and imports being triggered?
India is expected to have a great Cane crop, and the Sugar production may yield some 2sh mln m/t more than the domestic needs. The carry over from last crop is estimated at 5 mln m/t, but we believe it is half of that ! Anyway, the Indian Gov allowed for 1,5 mln m/t to be exported. Early in the year the Indian Gov allowed 1 mln m/t to be exported and only 800k m/t eventually left the country. Why? They didn’t like the price that was at least US$ 50 per m/t more than today!
Thailand is also expected to have a better Cane crop, which could yield 600k/1,3 mln m/t more sugars than the crop before. Any extra production will be for the export market. Cane farmers are not happy with the Cane provisional price that is the equivalent of around 18sh cts/lb. The World market is around 14sh!
Central and South America Cane crops is expected to be reasonable, with some producing a touch more and no drops are expected. The region may have a tiny bit more to export.
So, one may see that the production increments are not massive and there are some countries that will produce less, but overall, more gains than losses.
Sugar Consumption is the main difference on many S&D estimates as some are more ”excited” on the drop of sugar consumption due to “Appetite- suppressing injections” , “Weight-loss injections that help you feel full sooner” and “Injections that reduce hunger and cravings” !
These description above encouraged many researchers to cut sugar consumption, more than GDP and population growth would contribute to consumption growth.
Well, according to many reports, by 2029 40 million people would be using or taking them! Well, that’s less than 0,5% of the World Population! I would not get too excited about it, yet!
So, it leaves us to talk about Brazil! The 25/26 Cane crop is due to end soon and may finish around 10/20 mln m/t lower on Cane and due to a higher Sugar Mix (% of Cane juice going to sugar vs. ethanol) despite a lower ATR (the amount of sugar in the Cane) the final sugar production will be marginally similar/better than last year.
Sugar stocks in Brazil are similar, and Ethanol stocks lower and by the start of the coming crop, both stocks will be close to not much.
So, why Sugar prices tumbled from 15/17 cts range to 13sh/15 cts range in the past 6 weeks?
During the Sugar week in Brazil (Oct 25), from the first meeting/presentation to the last one (during the week) the emphasis was on the coming Cane crop i.e. higher acreage, better Agri yields and higher sugar content. It was noted that current lower sugar prices, depending on crude prices and the real could shift some of the Juice Mix towards Ethanol. The higher the Cane crop the higher the limitation for Sugar crystallisation in terms of % of the crop.
On the other hand, Brazil is producing more Ethanol from Corn. Brazil is going to produce close to 9,5 bln litres of Corn Ethanol vs. 23,5 bln litres of Cane Ethanol this year, reaching +/- 29% of the overall Ethanol production, equivalent of 22 mln m/t of Corn.
Brazil Corn Ethanol production in 2026/27 may reach 10,5/11 bln litres , 31% of the expected overall Ethanol production and about 25 mln m/t of Corn. Brazil is expected to produce 131/135 mln m/t of Corn in 2026, consume about 65 mln m/t leaving 66 mln m/t for Ethanol and Exports or at least 40/45 mln m/t for the export market. Plenty!
PRODUCTION GAINS ARE MODEST, BUT SHIFTS IN SUGAR CONSUMPTION, DRIVEN BY APPETITE-SUPPRESSING INJECTIONS, MAY HAVE A BIGGER IMPACT THAN GDP OR POPULATION GROWTH.
17 | ADMISI - The Ghost In The Machine | Q4 Edition 2025
BRAZIL’S 2026/27 SUGAR OUTLOOK IS UNCERTAIN, WITH FUNDS REMAINING MOSTLY SHORT SINCE LATE 2023 AMID SHIFTING SUPPLY AND DEMAND.
Back to Sugar, Brazil 26/27 Cane Centre-South region is expected to reach 630/640 mln m/t about 20/42 mln m/t more vs. 25/26 (598/610 mln m/t) about 1,4 to 2,9 mln m/t more sugar vs. 25/26, depending on ATR and Sugar Mix.
Based on past, current and forward crop estimates and demand, the 24/25 (April/ March) S&D went from about 2 mln m/t deficit to about 5 mln m/t surplus in 25/26.
When comes to 26/27 (April 26 to March 27) we will need to see how the weather may or may not affect Brazil as well India, Thailand etc…. We are going from half empty to half full jar of sugar and no guarantees either way for 26/27 but could get a little fuller!
Funds have been playing Sugar from the short side, mostly, since end of Dec 2023. There were few exceptions (weeks), but mostly short. The longest period Funds were nett short was from April 2017 to May 2020.
Producers may be fully priced for 2025 and about 55% on average for 2026 and less than 10% for 2027. Consumers are enjoying the low prices, but of course would prefer lower prices and not be caught long above the market.
Alberto Peixoto E:
albertopeixoto@apcommodities.london T: +44(0) 7570 714 981
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