Expectations of sugar production cuts in Brazil are heating up, New York raw sugar futures prices have risen three times in a row

The Zhitong Finance App learned that the market is once again concerned that sugar cane production cuts in Brazil, the world's largest sugar producer, may cause supply constraints. Raw sugar futures prices in New York rose for the third day in a row, setting the record for the longest continuous increase since February 21. According to an analysis by Rahil Sheikh, managing director of the trading company Meir Commodities India Pvt., Brazil's sugar production is expected to fall to the range of 39 million to 40 million tons in 2025-26, lower than the 41 million tons previously generally anticipated by the market. This adjustment is mainly based on widespread dry weather in the early stages of crop growth, which led to a decline in yield levels.

The Sheikh specifically pointed out that current market prices are still supported by Pakistan's demand for physical procurement. Furthermore, as the world's second-largest sugar producer, India's 2024-25 sugar export policy has attracted much attention — this year's export window will close on September 30, and exports for the new production season are expected to start as early as February next year, which means that global trade flows will face phased tension over the next five months.

Third-party analysis agency Covrig Analytics revealed in its latest report that as of August 31, Brazil's sugar inventory was 9.3 million tons, down 8% from 10.1 million tons in the same period last year. The agency's analyst Claudiu Covrig emphasized that there is currently no excess sugar inventory in Brazil.

At the same time, the report pointed out that in order to push sugar prices to form a continuous upward trend, the market needs to see definitive evidence that Brazil's actual production is far below the level of data currently published by the Brazilian Sugar Industry Association (Unica). Currently, the market is closely monitoring weather changes and crop growth progress in production areas. Any sign that production falls short of expectations may increase price fluctuations.

As of press time, the price of raw sugar in New York rose 1.9% to 16.81 cents per pound. London sugar prices rose 1.6%; New York cocoa prices rose and Arabica coffee prices fell.