The global sugar market is projected to face a smaller-than-expected supply surplus in the 2024/25 season (October-September), primarily due to a significant reduction in Brazil’s sugar crop, according to broker StoneX. The firm revised its forecast for Brazil’s Centre-South sugar output, lowering it by nearly 2 million metric tons to 40.5 million tons. This decrease is attributed to lower quality sugarcane this year and a smaller-than-anticipated allocation of cane for sugar production.
Brazilian mills are maintaining a high level of ethanol production to meet increasing domestic demand, which has resulted in a lesser allocation of cane to sugar production than initially expected at the start of the harvest in March. StoneX adjusted its projection for the sugar mix—the percentage of cane allocated to sugar production—from 52% in May to 50.5%.
Other notable changes in projections for major sugar producers include an increase of 500,000 tons for China, bringing its total to 11 million tons, and a decrease of 200,000 tons for Russia, now at 6.8 million tons. India’s sugar production estimate remains unchanged at 28.8 million tons.
As a consequence of these adjustments, StoneX now forecasts a surplus of 1.21 million metric tons for the 2024/25 season, a significant reduction from the 2.51 million tons estimated in May. This outlook is slightly more optimistic for sugar prices compared to recent updates from other analysts, who have raised their surplus estimates.