Sugar Prices Plummet as Brazil's Production Forecast Drops

As of August 14, 2025, sugar prices have been experiencing continued downward pressure after reaching a 2-month high earlier this week. The NY world sugar #11 (SBV25) contract is down 1.66%, while the London ICE white sugar #5 (SWV25) contract is up 0.51%.

The recent decline in sugar prices is largely attributed to reports of reduced cane yields from Brazil's sugar farmers. According to Covrig Analytics, Brazil's 2025/26 sugarcane production may fall below 600 million metric tons (MMT), significantly lower than the Brazilian government's forecast of 663.4 MMT. This has raised concerns about tighter global sugar supplies.

Furthermore, the Commitment of Traders (COT) report from last Friday showed that funds have increased their net-short positions in NY sugar futures by 25,923 positions to 151,004 short positions, the highest level in almost 6 years. This excessive short position could exacerbate any potential short-covering rally in sugar futures.

On a positive note for sugar producers, the outlook for higher sugar exports from India is emerging. Bloomberg reported that India may permit local sugar mills to export sugar in the next season, which starts in October. This is due to abundant monsoon rains, which are expected to produce a bumper sugar crop. India's Meteorological Department reported that cumulative monsoon rain in the country was 4% above normal as of August 4.