Recent developments in key sugar-producing regions are reshaping the global market outlook. In India, the government has introduced new policies to divert more sucrose to ethanol production and use rice for biofuel, which is expected to reduce sugar exports and increase supply pressures. This strategic shift highlights India’s focus on expanding its ethanol sector, potentially decreasing global sugar availability.
Sugarcane production in India is progressing well, supported by higher-than-normal rainfall anticipated in most regions in September, although some areas may receive normal to below-normal rainfall. For the 2024/25 season, sugar production is forecasted to reach 33.3 MMT before accounting for the amount diverted to ethanol production.
In Brazil’s Center-South region, severe fires have significantly impacted sugarcane production, burning over 80,000 hectares across more than 10,000 fires. This has led to a downward revision of production forecasts to around 40 MMT for the 2024/25 season. These fires, combined with ongoing drought conditions, are expected to reduce yields and tighten supply further.
Reflecting these tightening supply conditions, the International Sugar Organization (ISO) has projected a significant global sugar deficit of 3.58 MMT for the 2024/25 season. This deficit forecast considers the reduced supply caused by adverse weather and significant policy changes in major sugar-producing regions.
Explore how this news affects the Global Sugar Prices Forecasts on Vesper.
