Jul 24 / Lívea Coda

A tour around the Northern Hemisphere’s preliminary estimates

  Back to main blog page

"Despite the movement in the market this week, it is also important to keep in mind the recent changes in expectations regarding the Northern Hemisphere. Tracking how these figures evolve could prove insightful, especially considering the Q4/25 and Q1/26. Our analysis will cover Europe, India, the US, China, and Thailand."

A tour around the Northern Hemisphere’s preliminary estimates

  • Sugar prices fell at the beginning of the week due to weak demand and Indian crop expectations. However, the raw contracts recovered 2% on July 24 amid physical market rumors.

  • Europe expects a 10% drop in beet area, with production falling by 1.4Mt in 2025/26, increasing import needs despite good crop development.

  • U.S. sugar output may slightly decline, driven by lower beet yields, while Louisiana cane area continues to expand for the sixth year.

  • India’s production is set to recover to ~32Mt, supported by strong monsoon and crop conditions; exports remain uncertain.

  • Thailand’s output rebounds to 10.1Mt, with potential to reach 11.5Mt in 2025/26 and boost exports above 8Mt.

  • China maintains strong production (~11.2Mt) and uses stock levels to time imports strategically, taking advantage of recent price dips.

SSugar prices failed to sustain the gains seen in the previous week and started Monday, July 21, on a bearish trend. The lack of significant movement in demand, coupled with expectations of a robust harvest in India in next season, put pressure on raw sugar prices, with the September contract closing Wednesday at 16.24 c/lb. However, part of these losses were reversed on Thursday (24), driven by rumors of increased demand in the physical market. As a result, the sweetener rose 2%, closing the day at 16.57 c/lb.

Despite the movement in the market this week, it is also important to keep in mind the recent changes in expectations regarding the Northern Hemisphere. Tracking how these figures evolve could prove insightful, especially considering the Q4/25 and Q1/26. Our analysis will cover Europe, India, the US, China, and Thailand.


EU+UK Estimated Imports (Total Sugar – ‘000t)

Source: EC, Hedgepoint


Starting with Europe, some early trends for the 24/25 season are worth highlighting. Between 2022 and 2023, there was a significant surge in Ukrainian imports, which drove down domestic prices across Europe, even as the continent increased its own exports during that period. This trend has led to a decline in imports for 24/25, though not enough to secure beet area. As a result, the European Commission estimates a 10.5% reduction in beet area. Including a relatively stable UK, our projection for the entire region reflects a 10% decline.

EU 27+UK Area x Yield

Source: : EC, Green Pool, Hedgepoint

Despite some weather concerns during the spring, beet development has reportedly progressed well, with expectations of yield improvement. Nevertheless, overall production is still forecasted to decline year-over-year. Our outlook for the EU+UK points to an early drop of 1.4 million tons by 25/26, which will likely increase the region’s import needs.

Europe and the US are the only regions that official agencies reported possible yearly drop to sugar production. Contrary to the EU, however, the US might only have a marginally lower result, from 8.43Mtrv to 8.39Mtrv in 25/26. Production is expected to be lower than in 24/25 due to a reduction in beet output, as yields are projected to be slightly lower, offsetting gains from cane-producing regions. This trend penalizes beet share in total production. Regarding cane area, Louisiana cane acreage is expected to continue expanding, marking its sixth consecutive year of growth and the fourth year in a row surpassing Florida.

US (left) and India (right) Sugar Balances – Oct Sep

Source: USDA, ISMA, AISTA, ChiniMandi, NFCSF, Hedgepoint


On the bearish side, India has been spotted in the news reporting higher acreage and cane development. The monsoon has progressed well across India, and water reservoir levels remain healthy. Therefore, not only area, but yields should improve, guaranteeing a recovery to sugar production to, at least, close to 32Mt. However, export volumes remain contingent on government decisions and may only be authorized later in the season.

Thailand Precipitation Anomaly in mm (June – left; July* – center and August expectation - right)

Source: Thai Meteorological Department 


Although there are some concerns about weather conditions in Thailand, particularly in the central region, production is expected to continue improving. From the 8.8Mt produced in 23/24, the current season has already added over 1Mt, reaching 10.1Mt. Looking ahead to 25/26, the recovery trend is likely to persist, especially given the favorable weather in the northern and eastern regions. We project that Thailand could reach close to 11.5Mt in production and increase its exports to over 8Mt.


China was also exerting a bearish influence on the market in recent weeks, despite maintaining its import activity. This is due to two main factors. On the production side, China reached a level not seen since 13/14, surpassing 11Mt in 24/25. The outlook for 25/26 remains strong, with expectations around 11.2Mt.

This production strength gives China more flexibility in its import strategy. While the country continues to import, it now has the stock levels to wait for favorable market conditions. Recently, China capitalized on both the May contract expiry and the price dip in June. However, new imports from the country could add some support to contracts in the short-term.

Still, overall, the Northern Hemisphere is showing strong signs of a potential recovery in the 2025/26 season. When combined with Brazil’s outlook, this points toward a global surplus scenario. As a result, sugar prices are expected to remain under pressure and likely stay below last year’s levels.

In Summary

This week’s sugar market showed short-term volatility, with prices initially falling due to weak demand and expectations of a strong Indian crop, before partially recovering on July 24. However, the Northern Hemisphere’s preliminary outlook for the 2025/26 season points to a potential global surplus.

Europe is expected to see a 10% reduction in beet area, leading to a 1.4Mt drop in production, despite favorable crop development. In the U.S., sugar output may decline slightly due to lower beet yields, while cane acreage continues to expand, particularly in Louisiana.

However, India is on track for a production rebound to around 32Mt, supported by good monsoon conditions, though export volumes remain uncertain. Thailand’s recovery continues, with output projected to reach 11.5Mt and exports exceeding 8Mt. Meanwhile, China maintains strong production levels and is strategically timing imports, leveraging high stock levels.

Altogether, the Northern Hemisphere’s recovery, combined with Brazil’s strong outlook, suggests a global surplus scenario, likely keeping sugar prices under pressure in the coming months.

Weekly Report — Sugar

Written by Lívea Coda
livea.coda@hedgepointglobal.com
Reviewed by Laleska Moda
laleska.moda@hedgepointglobal.com
www.hedgepointglobal.com

Disclaimer

This document has been prepared by Hedgepoint Schweiz AG and its affiliates (“Hedgepoint”) solely for informational and instructional purposes, without intending to create obligations or commitments to third parties. It is not intended to promote or solicit an offer for the sale or purchase of any securities, commodities interests, or investment products. Hedgepoint and its associates expressly disclaim any liability for the use of the information contained herein that directly or indirectly results in any kind of damages. Information is obtained from sources which we believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. The trading of commodities interests, such as futures, options, and swaps, involves substantial risk of loss and may not be suitable for all investors. You should carefully consider wither such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results. Customers should rely on their own independent judgment and/or consult advisors before entering into any transactions. Hedgepoint does not provide legal, tax or accounting advice and you are responsible for seeking any such advice separately.  Hedgepoint Schweiz AG is organized, incorporated, and existing under the laws of Switzerland, is filiated to ARIF, the Association Romande des Intermédiaires Financiers, which is a FINMA-authorized Self-Regulatory Organization. Hedgepoint Commodities LLC is organized, incorporated, and existing under the laws of the USA, and is authorized and regulated by the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA) to act as an Introducing Broker and Commodity Trading Advisor. HedgePoint Global Markets Limited is Regulated by the Dubai Financial Services Authority. The content is directed at Professional Clients and not Retail Clients. Hedgepoint Global Markets PTE. Ltd is organized, incorporated, and existing under the laws of Singapore, exempted from obtaining a financial services license as per the Second Schedule of the Securities and Futures (Licensing and Conduct of Business) Act, by the Monetary Authority of Singapore (MAS). Hedgepoint Global Markets DTVM Ltda. is authorized and regulated in Brazil by the Central Bank of Brazil (BCB) and the Brazilian Securities Commission (CVM). Hedgepoint Serviços Ltda. is organized, incorporated, and existing under the laws of Brazil. Hedgepoint Global Markets S.A. is organized, incorporated, and existing under the laws of Uruguay. In case of questions not resolved by the first instance of customer contact (client.services@Hedgepointglobal.com), please contact internal ombudsman channel (ombudsman@hedgepointglobal.com – global or ouvidoria@hedgepointglobal.com – Brazil only) or call 0800-8788408 (Brazil only).  Integrity, ethics, and transparency are values that guide our culture. To further strengthen our practices, Hedgepoint has a whistleblower channel for employees and third-parties by e-mail ethicline@hedgepointglobal.com or forms Ethic Line – Hedgepoint Global Markets. “HedgePoint” and the “HedgePoint” logo are marks for the exclusive use of HedgePoint and/or its affiliates. Use or reproduction is prohibited, unless expressly authorized by HedgePoint. Furthermore, the use of any other marks in this document has been authorized for identification purposes only. It does not, therefore, imply any rights of HedgePoint in these marks or imply endorsement, association or seal by the owners of these marks with HedgePoint or its affiliates.