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Sugar and Ethanol Daily Report

By: Vitor Baggi, Market Intelligence Brazil Intern

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Possible Return of India to the Import Market Adds Fuel to the Sugar Rally

The sugar market experienced strong appreciation this Tuesday (18), driven primarily by increasingly consistent rumors that India may open space for sugar imports in the coming months. By the end of the trading session, the first screen of raw sugar (NY #11) was priced at US¢ 17.47/lb (+3.56%), after reaching intraday levels not seen in the past 14 months. Meanwhile, white sugar (LDN #5) closed at US$ 539.50/t (+3.15%), trading at the highest levels since early 2024.

Although there is still no official decision, the market has begun treating measures aimed at India's domestic supply, including limited tariff-free imports, as increasingly likely. If confirmed, purchases could approach 1 million tons, adding a new significant source of demand to the international market at a time when global deficit estimates are being revised upward. Our estimates indicate that the net position of funds advanced between 50,000 and 60,000 lots, moving to an estimated range of 75,000 to 85,000 contracts bought. 

Intraday of NY #11 Sugar, October Screen SBV26 (US¢/lb)

image 135982

Source: ICE-US. Prepared by: StoneX.

Overview

In India, discussions have intensified regarding measures to curb the escalation of domestic sugar prices, including tariff-free imports, stricter restrictions on private stockpiles, and a possible review of cane allocation for ethanol production. Although these measures are still under evaluation, the increased likelihood of imports is already shifting market perceptions. The topic has gained traction amid the continued appreciation of domestic prices, which has increased pressure on the government to adopt supply measures. In this context, some participants have begun to view imports as an economically viable alternative to replenish internal supply and curb further price increases. If the country indeed returns to the international market after nearly a decade without significant purchases, the additional demand could intensify competition for available sugar in a scenario already marked by concerns about global supply.

  • What to expect:

  • The market will continue to closely monitor the Indian government's decision on a possible opening for sugar imports. Confirmation of this measure could add a new significant source of demand to international trade and serve as another catalyst for a market already supported by climatic concerns and upward revisions of global deficits. At the same time, agents will keep an eye on the evolution of production in Brazil's Center-South region and the climatic developments associated with El Niño, factors that remain central to price formation in the coming months.

 

image 135983

Sources: ICE, CEPEA, B3, ANP, NYMEX, CBOT, Central Bank of Brazil, California Air Resources Board (CARB), CONSECANA, StoneX. Design: StoneX.
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