Global sugar futures prices improve due to reduced production in Brazil
30-May-2025 02:25 PM
New York. Due to weak production conditions in Brazil, the world's largest sugar producer and exporter, pressure has increased on global sugar futures prices.
On the previous trading day, the futures price of raw sugar for the July contract on the New York Exchange rose by 0.10 cents per pound (0.59 percent), while the white sugar futures price for August delivery on the London Exchange increased by $2.20 per tonne (0.47 percent).
According to trade analysts, sugar futures prices were initially weak, but after reports of reduced production in Brazil, traders engaged in short covering, halting the downward trend and leading to some price recovery.
According to a report from UNICA, the apex body of Brazil's sugar industry, sugar production in the Central Southern region dropped by 6.8 percent to 24.08 lakh tonnes in the first fortnight of May 2025 compared to the same period last year.
From 1 April to 15 May 2025, total sugar production in the region reached 39.89 lakh tonnes, which is 22.7 percent lower than during the same period in 2024. Around 90 percent of Brazil’s sugar is produced in this region, with São Paulo being the leading producing state.
Sugar futures prices had been under pressure for the past two months. The raw sugar futures price in New York had dropped to the lowest level in more than four years, while the white sugar futures price in London fell to a four-and-a-quarter-month low.
The decline was mainly due to various global agencies forecasting surplus sugar production. According to a report from the US Department of Agriculture (USDA), global sugar production is expected to increase by 4.7 percent to a record 1,893.18 lakh tonnes in the 2025–26 season compared to 2024–25, which is 7.5 percent higher than total global consumption.
This will likely lead to a higher ending stock globally. The new sugar production season in India will begin in October, and total output is also expected to rise.