Tight Stocks, Rising Output: Sugar Market Braces for a Volatile Season

The global sugar market stands at a critical juncture, with India—a major producer and consumer—set to end August with its lowest closing stock in seven years. The country’s late summer festival season and robust demand have sharply drawn down inventories, even as an early start to new crop crushing is poised to stabilize future supplies. The last time India’s stocks were this low was in 2017–18, raising questions about supply security. Nevertheless, an anticipated bumper crop in 2025–26 is set to restore market confidence, although volatility risks remain if yields falter or policy changes occur. Buyers and traders must navigate these shifting sands with care, watching developments in both weather and government quotas as key triggers for price action and sentiment.

📈 Prices

Origin	Location	Type	Purity	Delivery Terms	Price (EUR/kg)	Change (WoW)	Last Updated
LT	Mirijampole	ICUMSA 45, 0.2-1.2 mm	99.7%	FCA	0.60	0.00	2025-08-29
GB	Norfolk	ICUMSA 32, 0.3-0.6 mm	—	FCA	0.57	0.00	2025-08-21
GB	Norfolk	ICUMSA 45, 0.212-0.425 mm	—	FCA	0.57	0.00	2025-08-21
CZ	Vyškov	ICUMSA 45, 0.5-0.75 mm	—	FCA	0.59	+0.01	2025-08-21
DE	Berlin	ICUMSA 45, 0.4-0.65 mm	—	FCA	0.69	0.00	2025-08-21

Market Sentiment: Stable, with upward risk due to low Indian stocks and potential export policy volatility.

🌍 Supply & Demand

• India’s August-end sugar stock is set to fall to ~46 lakh tonnes (lt), below both the Food Ministry’s (68.94 lt) and ISMA’s (52 lt) earlier projections.
• Last year, stocks were 79 lt at the season’s close, helping offset a production shortfall (261 lt vs. 275.5 lt consumption).
• The 2025–26 outlook is bullish on output: ISMA projects a rise to 349.01 lt (18% YoY growth).
• The September quota of 23.5 lt will likely be fully consumed, with October–November supply reliant on the new crop and possible record yields.

📊 Fundamentals

• Closing stocks this season at a historic low heightens sensitivity to output shifts, weather, and government policies.
• Heavy festival demand and an early Dussehra–Diwali have accelerated stock drawdown versus prior years.
• Globally, India’s export availability could be minimal in Q4 2025, pressuring nearby regional markets.
• Historical comparison: The last sub-50 lt closing stock in 2017–18 (39.41 lt) was followed by price spikes due to perceived supply scarcity.

⛅ Weather Outlook

• India (Uttar Pradesh, Maharashtra, Karnataka):
  Recent monsoon showers have improved soil moisture in cane-growing belts; early forecasts indicate normal to above-normal rainfall through mid-September. This should support plant growth and juice recovery, underpinning ISMA’s bullish output estimate for the upcoming crush.
• Brazil:
  Dry weather accelerated harvests, but rainfall is expected from next week, which could briefly disrupt field activity but is beneficial for plantings. No major yield threats seen short-term.
• Thailand:
  Rainfall near average, supporting a return to normal cane yields after drought-affected 2024. No significant weather risks into September.

🌏 Global Production & Stocks

Country	2024–25 Output Estimate (lt)	2024–25 Stock (lt)	Notes
India	261	46 (est. Aug 31)	Stock drawdown due to strong demand
Brazil	415	NA	Strong harvest pace, record exports to China & Indonesia
Thailand	88	NA	Rebounding after 2024 drought
EU	165	NA	Steady output, tight availability in Eastern Europe

📆 Trading Outlook & Recommendations

• Buyers: Consider forward cover for Q4/Q1 needs amid Indian supply tightness and limited export offer. Monitor new crop arrivals and ISMA revisions.
• Traders: Watch for policy shifts on Indian exports. Price volatility risk is elevated on low stocks—be cautious with short positions until new crop flow is confirmed.
• Producers (EU/Eastern Europe): Margins supported by stable/new high prices. Prepare for potential demand surge if India restricts exports in Q4.
• Investors: Expect near-term volatility but longer-term normalization as India’s bumper 2025–26 crop arrives from November.
• Risk: Sudden changes in weather or festival demand spikes could trigger price jumps given tight inventory.

🔮 3-Day Price Forecast (Key Exchanges)

Market	Current Price (EUR/kg)	3-Day Forecast (EUR/kg)	Sentiment
CBOT (ICE US #11 equivalent)	—	Minor upside risk (+0.5%)	Stable/Bullish
Euronext (Paris, white sugar)	—	Stable, possible +0.5%	Stable
Mirijampole (LT)	0.60	0.60 — 0.61	Stable to mildly bullish
Norfolk (GB)	0.57	0.57	Steady

Key market drivers continue to be Indian supply dynamics and policy visibility. Upward price risk limited by strong global output but amplified by short-term tightness in Asia.