Sugar prices closed higher on Friday, with NY world sugar #11 up +0.13 (+0.80%) and London ICE white sugar #5 up +4.10 (+0.85%). The rise was fueled by a weaker dollar index, prompting short covering in sugar futures. London sugar hit a 5-week high due to increased global demand, with China’s July sugar imports up +76% and Pakistan tendering for 200,000 MT of refined sugar.

However, prices fell to 2-week lows on Monday as Brazil’s sugar mills are expected to prioritize sugar production over ethanol, crushing more cane for sugar. NY sugar hit a 2-month high last Tuesday on concerns over weaker cane yields in Brazil. Brazil’s sugar output in the second half of July fell by -0.8% y/y, but the percentage of sugarcane crushed for sugar increased.

The outlook for higher sugar exports from India may weigh on sugar prices, as India is projected to have a bumper sugar crop due to abundant monsoon rains. India’s 2025/26 sugar production is estimated to increase by +19% y/y to 35 MMT, following a decline in production to a 5-year low in the previous season.

Sugar prices have been pressured by expectations of a surplus in the 2025/26 season, with projections of a 7.5 MMT global sugar surplus. The USDA forecasted record global sugar production for 2025/26, leading to an increase in global sugar ending stocks. Thailand’s sugar production is also on the rise, contributing to the bearish outlook for sugar prices.

The International Sugar Organization raised its global sugar deficit forecast to a 9-year high, signaling a tightening market after a surplus in the previous season. The USDA’s bi-annual report projected a record sugar production for 2025/26, with increases in human sugar consumption and ending stocks. Brazil, India, and Thailand are expected to see higher sugar production in the upcoming season.

Read more at Yahoo Finance: Sugar Prices Settle Higher as a Weak Dollar Spurs Short Covering