Asian sugar market to see shifts amid evolving biofuel landscape, supply challenges

The Asian sugar market is set to undergo significant changes in 2025 due to agricultural dynamics, environmental policy, and global market conditions. Thailand's sugar market is expected to strengthen owing to higher cane output, with the 2024-25 sugarcane crushing season seeing a 24% increase in cane crush year over year. This could lead to increased Thai exports in Q1 2025. In contrast, India's sugar production is estimated to decrease by 7% in 2024-25 due to diversion of sugar for ethanol. Dry bulk sugar freight rates have remained steady in 2024 despite geopolitical tensions, with the freight differential between Brazil and Thailand to Indonesia around $14/mt. Indonesia has released its import licenses for sugar, with an expected import volume of around 4.2 million mt for industrial use and re-export in 2025.

The Asian sugar market is poised for significant shifts in 2025 driven by a combination of agricultural dynamics, environmental policy and global market conditions. The global biofuel movement, propelled by a collective drive to limit carbon emissions by 2030, will have a trickle-down impact on the sugar market, particularly in regions where sugarcane is the primary feedstock for biofuels. Higher cane output from Thailand In Thailand, the 2024-25 sugarcane crushing season commenced Dec. 6, starting from the Eastern and Northeastern regions. S&P Global Commodity Insights estimates the cane crush for marketing year 2024-25 (October-September) at 102 million mt, a 24% increase year over year. “We should be seeing strong Thai exports in Q1 2025, especially during a period of seasonal tightness in the global market without Brazilian crop,” said a Singapore-based trader. As of Dec. 15, the total cane crushed in Thailand for the 2024-25 season was at 4.47 million mt, up 2.07 million mt ...