Sugar prices down to week lows

October NY world sugar #11 (SBV25) on Wednesday closed down -0.36 (-2.26%), and December London ICE white sugar #5 (SWZ25) closed down -6.70 (-1.44%).

Sugar prices tumbled to 1-week lows on Wednesday and settled sharply lower as Brazil ramps up sugar production. Unica reported Wednesday that Brazil’s Center-South sugar output in the second half of August rose by +18% y/y to 3.872 MT. Also, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the second half of August increased to 54.20% from 48.78% the same time last year. However, cumulative 2025-26 Center-South sugar output through August fell -1.9% y/y to 26.758 MMT.

Sugar prices were already on the defensive from Tuesday, when sugar trader Sucden said that India may divert 4 MMT of sugar to make ethanol in 2025/26, which is not enough to ease the country’s sugar surplus and may prompt India’s sugar mills to export as much as 4 MMT of sugar, above earlier expectations of 2 MMT.

An excessive short position by funds in NY sugar could fuel gains in any short-covering rally. Last Friday’s weekly Commitment of Traders (COT) report showed funds boosted their net-short positions in NY sugar futures by +32,849 to 182,608 in the week ended September 9, the most in almost 6 years.