Datagro reduces sugar surplus forecast by 1 million tonnes on Brazil and India

Datagro, a consultancy, said that the global sugar market will have a smaller than expected surplus for 2025/26, which began in October, due mainly to production cuts made in Brazil and India.

Datagro announced in a conference call with its clients that they were reducing their estimate of the global sugar surplus for 2025/26 to 1 million metric tonnes, down from 2.8 millions tons previously forecast.

The sugar production in Brazil’s center-south sugar belt will drop towards the end this year as mills close early and change their strategy by using less cane for sugar and more for fuel ethanol.

Datagro has revised its Brazil centre-south estimate of sugar to 40.8 from 41.1 millions tons. The sugar mix or cane amount allocated to sugar production is expected to be 51.2%, up from 51.6%.

The mills in Brazil are expected to focus more on ethanol for next year's harvest, as the prices of biofuels will continue to be higher than those for sugar. This is after New York's raw sugar prices fell to their lowest level in five years this month.

The sugar cane crop in India was reduced by 700,000 tonnes to 32.1 millions tons due to excessive rains, the company said.

Datagro reported that major global importers like China and Indonesia increased their purchases to take advantage lower prices.

Brazil, the world's top sugar exporter, shipped a volume close to a record of 4.2 millions tons in October. (Reporting and editing by Alexander Smith; Marcelo Teixeira)

(source: Reuters)