JULY – SEPTEMBER 2025

New York No 11 Pricing Update

The third quarter of 2025 saw the New York (NY) No 11 market remain range bound and under sustained pressure, with prices confined primarily between 16.0 and 17.0 US c/lb. While the market attempted several rallies during the quarter, momentum was repeatedly capped by stronger than expected production results from Centre South (CS) Brazil. Speculative fund positions remained heavily net short throughout the period, limiting upside potential. 

The NY No 11 October 2025 contract began July under pressure, trading within a relatively narrow range of 15.5 and 16.82 US c/lb, with sentiment capped by persistent strength in Brazilian production and steady export flows. The market briefly firmed mid-month, touching an intra-trading day high of 16.82 US c/lb on 18 July 2025, as traders reacted to marginal gains in energy prices and a slightly firmer Brazilian Real. However, those moves were short-lived, as UNICA data continued to show strong crushing volumes, and record sugar mixes above 52%, reinforcing expectations of an abundant Quarter 3 supply. By month-end, the NY No 11 October 2025 contract had softened back towards 16.35 US c/lb, with the broader tone remaining heavy amid limited speculative short-covering.

August 2025 trading saw a continuation of price pressure. The front month contract fluctuated between 16.01 US c/lb (6 August 2025) and a monthly high of 16.94 US c/lb (12 August 2025), with intraday volatility largely linked to macro factors, notably fluctuations in the Brazilian Real and crude oil. Despite a brief rally mid-month supported by higher ethanol values and talk of a narrowing sugar–ethanol parity, fundamentals remained bearish. UNICA data confirmed cumulative CS Brazil sugar output tracking near last season’s pace, with ATR stability and favourable weather allowing mills to sustain high output. End of month values near 16.37 US c/lb reflected both the comfort in nearby supply, and an absence of fresh demand from Asia, keeping speculative shorts rooted above 130 000 lots through late August 2025.

September was characterised by renewed weakness ahead of expiry. The NY No 11 October 2025 contract traded between 15.25 US c/lb (22 September low) and 16.10 US c/lb at final settlement on 30 September 2025. The expiry saw 1.52 million tons delivered against the tape, the majority from CS Brazil, with smaller parcels from Central America, marking one of the heaviest October deliveries in recent years. The October/March spread settled near 50 points carry, consistent with comfortable short-term supply. With the expiry behind it, attention shifted to the March 2026 contract, which inherited a bearish tone, slipping towards 14.28 US c/lb as of late October 2025. The continued decline reflected sustained CS Brazil output, an easing white premium, and fading import appetite from Asia.

Speculative participation intensified through the quarter. Commodity Futures Trading Commission (CFTC) data showed managed money, expanding net shorts from around
130 000 lots in August 2025 to over 170 000 lots by late September 2025, representing the largest bearish stance since 2019. This increase was driven by confidence in record CS Brazil output, and the growing perception of a global surplus heading into 2025/2026.

Global Sugar Market Fundamental Update

From a fundamental perspective, the July to September 2025 period, reinforced a distinctly bearish outlook for the global sugar market, as production results across key origins continued to exceed expectations. In Brazil, the latest UNICA update for the second half of September 2025 confirmed that the CS region crushed 40.9 million tons of cane, producing 3.14 million tons of sugar, marking an increase of 10.8% year-on-year for the period. Cumulative figures for the 2025/2026 campaign reached 490.9 million tons of cane crushed, and 33.5 million tons of sugar produced, with a season-to-date sugar mix of 52.68% and an ATR of 136.04 kg/ton, reflecting the recovery in sucrose content after a sluggish start. The sugar mix however, fell slightly in the latter part of September 2025 to 51.17%, as a firmer domestic ethanol market began to attract some diversion of cane. 

The table below summarises the key UNICA indicators for the second half of September 2025:

Market consensus now places total 2025/2026 CS Brazil (April 2025 – March 2026) sugar output between 40.3 and 40.9 million tons, from an estimated 490–500 million tons of cane, confirming another near-record crop year. Looking ahead, early estimates for the 2026/2027 campaign suggest output could edge slightly higher to 41-42 million tons, assuming stable rainfall and continued investment in crystallisation capacity. The structural shift toward higher sugar output capacity remains evident, even as the narrowing spread between sugar and ethanol prices prompts debate over potential late season mix adjustments. The recent policy decision by Brazil’s National Energy Policy Council to raise the ethanol blend in gasoline to 30% from 27%, underscores this tension, though most analysts maintain that mills will remain at, or close to, maximum sugar production levels through the remainder of the season.

In India, early monsoon performance has been stronger than anticipated, supporting an optimistic outlook for the 2025/2026 season (October 2025 to September 2026). According to the India Meteorological Department, cumulative rainfall across the key cane-producing states reached approximately 106% of the Long Period Average (LPA) by late September 2025, with Maharashtra and Karnataka receiving up to 122% of normal rainfall. This has spurred expectations of an increase in planted area and improved cane yields. Market participants now estimate that India will crush between 400 and 420 million tons of cane, producing 34 to 36 million tons of sucrose, of which about 3.5 million tons is expected to be diverted to ethanol. Net sugar output is therefore projected at 32 million tons, representing a recovery of 4 to 6 million tons year-on-year. While this would restore India’s exportable surplus, the current NY No. 11 price structure render exports uneconomical without government intervention. Given the WTO ruling against prior export subsidies, the likelihood of a renewed export incentive scheme remains low. Most observers instead expect the Indian government to increase diversion to ethanol production, aligning with its long-term energy transition objectives and helping balance the domestic sugar market.

Thailand is also poised for a strong 2025/2026 season (October 2025 to September 2026), supported by favourable weather and expanded cane acreage following attractive farm-gate pricing. Market participants estimate that Thailand will crush between 97 and 103 million tons of cane, yielding 11-12 million tons of sugar, of which approximately 3-4 million tons is expected to be available for export. The improved rainfall distribution since May 2025, combined with lower cassava returns, has reinforced the preference for sugarcane cultivation. The country’s exportable surplus adds to the global supply overhang anticipated through early 2026.

In the European Union and the United Kingdom, sentiment remains subdued. Market participants have flagged a year-on-year reduction in beet area of roughly 8-9%, largely due to low beet prices and increasing pest and disease pressures, including virus yellows outbreaks in France and the Netherlands. With pesticide restrictions in place and limited alternatives for pest control, the yield outlook has deteriorated modestly. Production for the 2025/2026 season (October 2025 to September 2026)  is now forecast between 16.0 and 16.6 million tons, marginally below the three-year average. Meanwhile, the US Department of Agriculture’s September 2025 WASDE report indicated that US sugar supply for 2025/2026 is expected at approximately 13.0 million tons. This reflects comfortable availability amid flat consumption growth. The slight decline in domestic production has been more than offset by higher imports and slower industrial demand, leaving the North American market well balanced and contributing marginally to the overall global surplus narrative.

From a global perspective, both S&P Global and GlobalData now forecast the 2025/2026 season to mark a clear return to surplus following last year’s deficit. According to S&P Global’s October 2025 Short-Term Sugar Market Outlook report, the world sugar balance is projected to swing to a surplus of around 2.2 million tons, driven by record output from CS Brazil, recovering production from India and Thailand, and stable beet yields across Europe. Meanwhile, GlobalData’s October 2025 World Sugar Price View report, places the surplus slightly higher, at 2.5 million tons, reflecting stronger exportable availability from Asia and Brazil. Both agencies forecast global production near 188-190 million tons against consumption of roughly 186-187 million tons, resulting in higher stock coverage ratios and ample nearby supply heading into 2026.

Market participants have flagged the following factors in the near to medium-term: 

Bull Factors

•   Potential reduction in the CS Brazil sugar mix as ethanol prices strengthen. 

• Risk of weather-related yield losses in India and Thailand due to excessive rainfall. 

• Sustained appreciation of the Brazilian Real or firming crude oil prices, increasing ethanol parity.

Bear Factors

•   CS Brazil sugar production exceeds current market expectations. 

• Announcement of Indian export permissions for 2025/2026, increasing global availability.

• Persistent large speculative net short positions capping rally potential.

• Weaker energy markets, reducing ethanol parity support.