March NY world sugar #11 (SBH25) Thursday closed down -0.28 (-1.43%), and March London ICE white sugar #5 (SWH25) did not trade with markets in the UK closed for the Boxing Day holiday.

NY sugar Thursday tumbled to a 3-1/4 month low and settled moderately lower.  Sugar prices have been under pressure since last Thursday when India's Food Secretary Chopra said that India may allow sugar exports if there is a surplus once domestic ethanol blending requirements are met.  The Indian government currently estimates a sugar surplus of about 1 MMT this season.

Sugar prices have also been undercut by the weakness in Brazilian real (^USDBRL), which encourages export selling by Brazil's sugar producers.  The real is just above last Wednesday's record low against the dollar.

An improved global supply outlook is undercutting sugar prices.  On November 21, the International Sugar Organization (ISO) reduced its 2024/25 global sugar deficit forecast to -2.51 MMT, compared to an August forecast of -3.58 MMT.  ISO also raised its 2023/24 global sugar surplus estimate to 1.31 MMT from an August projection of +200,000 MT.  

The outlook for higher sugar production in Thailand is bearish for sugar prices.  On October 29, Thailand's Office of the Cane and Sugar Board projected that Thailand's 2024/25 sugar production would jump by +18% y/y to 10.35 MMT.  Thailand produced 8.77 MMT of sugar in the 2023/24 season that ended in April.  Thailand is the world's third-largest sugar producer and the second-largest sugar exporter.

Reduced sugar output in India is supportive of prices.  The National Federation of India Cooperative Sugar Factories Ltd reported Monday that India's sugar production from Oct 1-Dec 15 fell -18% y/y to 6.1 MMT.  

Sugar output from Brazil's Center-South has recently declined, which is a bullish price factor.  Unica reported last Thursday that cumulative 2024/25 Center-South sugar output through November is down -3.7% y/y to 39.361 MMT.  

Drought and excessive heat earlier this year caused fires in Brazil that damaged sugar crops in Brazil's top sugar-producing state of Sao Paulo.  Sugar cane industry group Orplana said that as many as 2,000 fire outbreaks affected up to 80,000 hectares of planted sugarcane in Sao Paulo.  Green Pool Commodity Specialists noted that as much as 5 MMT of sugar cane may have been lost due to the fires.  Conab, Brazil's government crop forecasting agency, cut its 2024/25 Brazil sugar production estimate from November 21 to 44 MMT from a previous forecast of 46 MMT, citing lower sugarcane yields due to drought and excessive heat.  

In a supportive factor for sugar prices, India's Food Ministry on August 30 lifted restrictions on sugar mills producing ethanol for the 2024/25 year that starts November, which may prolong India's sugar export curbs.  Last December, India ordered sugar mills to stop using sugarcane to produce ethanol for the 2023/24 supply year to boost its sugar reserves.  India has restricted sugar exports since October 2023 to maintain adequate domestic supplies.  India allowed mills to export only 6.1 MMT of sugar during the 2022/23 season to September 30 after allowing exports of a record 11.1 MMT in the previous season.  However, on October 3, the Indian Sugar and Bio-energy Manufacturers Association (ISM) said India will have 2 MMT of sugar to export next season and urged the government to lift its current sugar export restrictions.

The Indian Sugar and Bio-energy Manufacturers Association (ISM) on September 26 projected India's 2024/25 sugar production would fall by -2% y/y to 33.3 MMT and that India's 2023/24 sugar reserves will be at 8.4 MMT on September 30, compared with a May projection of 9.1 MMT.  

As a supportive factor for sugar prices, the International Sugar Organization (ISO) on August 30 forecasted 2024/25 global sugar production of 179.3 MMT, down -1.1% y/y from 181.3 MMT in 2023/24.  

The USDA, in its bi-annual report released November 21, projected that global 2024/25 sugar production would climb +1.5% y/y to a record 186.619 MMT and that global 2024/25 human sugar consumption would increase +1.2% y/y to a record 179.63 MMT.  The USDA also forecasted that 2024/25 global sugar ending stocks would decline -6.1% y/y to 45.427 MMT.