Consultancy says Brazil's sugar condition is favorable for building global surplus

The Datagro consultancy reported on Wednesday that Brazil's sugar-growing conditions in 2025/26 are favorable, despite the slow start of the harvest. This will contribute to a global surplus expected at 1.53 million tons by 2025/26.

Plinio Natari, Datagro’s president and chief economist, stated that the cumulative rains in Brazil’s main sugar region (the center-south, CS) from October to March were among the best rainfalls in the past five years. This helped restore soil moisture.

Nastari said that the expected surplus of sugar comes after a deficiency of 4,67 million tons between 2024 and 25. He also added that India and Thailand are projected to have larger crops, which will help boost global availability.

Datagro estimated Brazil's CS 2020/21 sugar production at 42.04 millions tons, an increase from the 40.17million tons of the previous season. India's production was projected to increase to 31.6 millions tons from 26million tons. Thailand's production was predicted to increase to 11,18 million tonnes from 10,05 million tons.

Nastari stated that Brazil mills have delayed a surge in crushing volumes in order to allow more time for the cane to mature, as April's rains were favorable. This means that the second half of harvest will be stronger for the country.

Brazil's first harvest has been disappointing.

Datagro's projections on global sugar supply are similar to those made by other industry participants during New York Sugar Week. StoneX, a broker, said on Tuesday that the anticipated production recovery would keep ICE raw-sugar prices under control.

Nastari stated that the current sugar price will put pressure on countries with higher production cost, such as some European producers and India.

He said that there was no incentive to expand production in Brazil.

(source: Reuters)