Global Sugar Market Summary

• Sugar prices have retreated from early October highs, driven by policy changes and favorable weather in some producing regions. However, the broader outlook remains bullish as several analysts raise global deficit forecasts, while the threat of a Super El Niño adds uncertainty to production prospects.
• In India, changes to ethanol policy have redirected sugarcane derivatives away from ethanol production and back into the sugar market, potentially adding 3 million tonnes to domestic supplies. Maharashtra faces lower cane crushing and sucrose recovery, while reduced ethanol revenues add pressure on producers.
• Brazil’s sugar output is declining due to adverse weather and lower crop quality, while higher ethanol production amid rising crude oil prices is shifting the production mix. A stronger Brazilian real is also limiting export activity. Thailand faces lower production from dry conditions and financial pressure on farmers, while the European Union is heading towards one of its steepest output declines in decades due to unfavorable weather and pest damage.
• Elsewhere, Pakistan could emerge as a white sugar surplus supplier, while China’s stable domestic production is reducing import demand despite continuing weather risks. Senegal’s reinstatement of import restrictions is creating additional uncertainty for Brazilian exporters.
• Despite tightening supply prospects, heavy liquidation of speculative net-long positions poses a downside risk to prices. Traders are weighing widening deficit forecasts against short-term selling pressure, with weather developments, ethanol policy and export flows likely to determine the next market direction.