A recent surge in ICE raw sugar futures, which reached a two-month high, is anticipated to be short-lived. According to a Reuters poll of nine traders and analysts, the price rally will likely reverse as supply from the top two producers, Brazil and India, is expected to rise later this year.
Key Highlights:
Price Forecast:
The poll predicts that raw sugar prices will close the year at 18.25 cents per pound, reflecting a 13.5% decrease from Monday’s close and falling below the end-of-2024 levels.
The global sugar supply balance is projected to shift from a deficit of 2 million tons in 2024/25 to a surplus of 2 million tons in 2025/26.
Indian Crop Expectations:
Analysts expect a significant increase in India’s sugar production, forecasting a crop of 32.35 million tons for the 2025/26 season (October-September), up from 27.5 million tons in 2024/25.
John Stansfield, a senior sugar analyst at DNEXT Intelligence SA, noted that prices will likely decline due to the anticipated large Indian crop and potential for substantial export quotas.
Brazilian Production Insights:
Brazilian production is also expected to contribute to the supply increase, with projections for the Centre-South region to produce 41.6 million tons in 2025/26, up from approximately 40 million tons in 2024/25.
Claudiu Covrig, Chief Executive of CovrigAnalytics, mentioned that Brazilian production might intensify towards the end of the year, indicating a “bigger tail” effect due to a late harvest start in 2025.
White Sugar Price Estimates:
The median estimate for white sugar prices is projected at $505.00 per ton by the end of 2025, which is 9% lower than Monday’s closing price.
External Factors Influencing Prices:
Several traders indicated that factors beyond climate could impact sugar prices this year. A European trader highlighted that currencies, political dynamics, and trade wars, particularly involving the U.S. under Trump, could influence market expectations.