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Recent rains have improved sugarcane conditions in Argentina, raising hopes for a better-than-expected harvest after water levels fell 60% below the historical average. Authorities are working with sugarcane growers and sugar mills to align on policies for sugar and bioethanol production, with potential exports estimated between 800,000 and 900,000 metric tons (mt) if weather conditions remain favorable. However, unfulfilled export quotas and regulatory concerns could pressure domestic sugar prices.
Brazil is seeking to expand its sugar export quota to the United States (US) as part of ongoing trade negotiations linked to ethanol tariffs. As of W11, Brazil has exported 146,600 mt of sugar duty-free to the US, with any excess subject to an 80% import tax. In 2024, Brazil exported 876,700 mt of sugar to the US, generating nearly USD 440 million. The Brazilian government proposes increasing the sugar quota to between 300,000 and 400,000 mt, using this as leverage against US pressure to lower Brazil’s 18% tariff on American ethanol.
Discussions have already taken place between Brazil’s Vice President and the US Secretary of Commerce, with Brazil suggesting a working group to address bilateral trade. Analysts argue that sugar and ethanol are closely linked in Brazil, where most biofuel is sugarcane-based, unlike the US, which relies on corn. A possible outcome could involve Brazil offering a duty-free quota for US ethanol in exchange for an expanded sugar export quota, though the specifics remain under negotiation.
In the 2025/26 harvest, Brazil’s Center-South region is projected to process 612 million metric tons (mmt) of sugarcane, producing 42.35 mmt of sugar and 34.71 billion liters (L) of ethanol with a sugar mix of 51%. This represents a 1.4% decrease in sugarcane processing compared to the 2024/25 season, which was impacted by fires and drought. Although rainfall improved, increased fires during the 2024/25 season likely damaged fields, reducing sugarcane regrowth and long-term productivity.
Despite a 5.6% decline in sugar production last season, ethanol output increased by 3.7%, reaching 33.57 billion L. Favorable rainfall between Oct-24 and Feb-25 may improve the 2025/26 crop, although precipitation in Mar-25 and Apr-25 will be critical. Field conditions suggest increased cutting areas but a higher risk of impurities due to weed infestations. Expansion of other agricultural areas, especially in Goiás, Minas Gerais, and São Paulo, may also affect future sugarcane planting.
India is projected to produce 26.4 mmt of sugar in the 2024/25 season, a 2.94% decrease from the previous estimate of 27.2 mmt, according to the Indian Sugar Mills Association (ISMA). The decline is due to lower sugarcane production and the early closure of mills.
According to the All India Sugar Trade Association (AISTA), India's sugar output for the 2024/25 marketing year (MY) is projected to fall to 25.8 mmt, a 19.1% decrease from the previous year, while consumption is estimated at 29 mmt. This marks the first time since 20217 that sugar production will fall below consumption, primarily due to reduced sugarcane supplies in key states, including Maharashtra, where early mill closures have significantly lowered output. Due to early mill closures, Maharashtra's output is expected to decline to 8 mmt from 11 mmt. With estimated exports of 1 mmt, India's opening stock for the 2025/26 season is forecast to fall to 3.78 mmt, down from 7.98 mmt a year ago.
In 2024, the area under sugar beet cultivation in Kazakhstan's key regions increased to 25.2 thousand hectares (ha), nearly doubling from the previous year. Supported by government subsidies and favorable weather, sugar beet production reached a record 1.3 mmt. However, the processing capacity at sugar factories was insufficient to handle the harvest due to financial constraints. In response, the government introduced measures to support farmers, including increased transportation subsidies and additional working capital for sugar plants.
Investment subsidies have been raised to modernize the sector, and major sugar factories are undergoing capacity expansion, with plans to complete upgrades by 2026. Additionally, new sugar plants are being developed, including a large facility in Shu and a project by Al Khaleej Sugar, a leading United Arab Emirates (UAE) based sugar producer in Almaty, expected to be operational by 2027. Despite these investments, the sugar beet cultivation area is projected to decrease to 18.4 thousand ha in 2025 due to processing limitations and the need to align with agricultural best practices.
Ukraine exported over 403,500 mt of sugar in the first six months of MY 2024/25 (Sep-24 to Feb-25). The vast majority, 98.4%, was directed to global markets, with 1.6% going to the European Union (EU). Exports to the EU resumed in Feb-25, totaling 6,559 mt, primarily to Bulgaria, Greece, and Italy. Other major export destinations included Türkiye, Libya, North Macedonia, Somalia, and Sri Lanka. Ukraine produced 1.8 mmt of sugar in 2024, with an annual production estimate of 900,000 mt. Sugar exports in 2024 set a historical record, amounting to 746,300 mt.
Brazil's sugar prices fell to USD 0.48 per kilogram (kg) in W11, down 2.04% week-on-week (WoW) and 15.79% year-on-year (YoY), despite a 5.58% decline in sugar production in the Center-Southern region, according to the Brazilian Sugarcane and Bioenergy Industry Association (Única). The reduced output, totaling 39.82 mmt compared to 42.18 mmt last year, would typically support higher prices. However, the current price drop suggests a strong supply from previous stocks or increased global competition. If production remains lower, future prices could stabilize or rise, particularly if global demand strengthens or adverse weather impacts upcoming harvests.
US sugar prices reached USD 0.44/kg in W11, reflecting a 7.32% WoW increase, though still 8.33% lower than the same period last year at USD 0.48/kg. The primary factor influencing these price dynamics is an oversupply of sugar, driven by record domestic production and a significant rise in high-tier imports, which increased from 455,000 mt in 2022/23 to 1.231 mmt in 2023/24. Despite the surge in imports, domestic consumption has contracted, leading to higher beginning stocks and creating a supply-demand imbalance that is exerting downward pressure on prices.
Growing concerns about the continued reliance on high-tier imports, which are subject to tariffs but fall outside the United States Department of Agriculture (USDA) sugar program The increasing influx of these imports may jeopardize the US-Mexico sugar trade agreement, potentially exacerbating the oversupply and destabilizing the market further. Future price movements will largely depend on how the US navigates the balance between domestic production, high-tier imports, and demand.
Mexico's sugar prices rose to USD 1.12/kg in W11, increasing 5.66% WoW. The increase follows nationwide protests by sugarcane growers who have suspended operations at 49 sugar mills, demanding compliance with export quotas. Failure to meet the Law on Sustainable Sugarcane Development (LEDESCA), which ties sugarcane prices to domestic and export sugar prices, has resulted in an oversupply and a price decline of 39.72% YoY.
If mill shutdowns persist, domestic sugar supply could tighten, pushing prices upward. However, prolonged disruptions may also affect export commitments, potentially leading to further instability in future pricing.
Pakistan's sugar prices rose to USD 0.48/kg in W11, marking a 2.13% WoW and a 6.67% monthly increase. Pakistan's Prime Minister reassured the public that the country has sufficient sugar reserves, dismissing concerns of a genuine shortfall. In response to the price surge, he ordered measures to prevent hoarding and speculative pricing, common during Ramadan. Authorities are coordinating with sugar mills to ensure supply and enforce price controls. These actions aim to stabilize the market, but ongoing monitoring and strict enforcement are crucial to avoid further price hikes due to market manipulation. If successful, these measures could limit future price increases, but supply chain disruptions or non-compliance could sustain upward pressure.
With Argentina's sugarcane harvest improving due to favorable weather, the government and industry stakeholders should prioritize aligning policies on sugar and bioethanol production to ensure smooth export flows. Sugar mills should explore opportunities to meet export quotas and address regulatory concerns that could put pressure on domestic prices. To optimize export potential, Argentine producers should focus on securing agreements with key markets and leverage favorable weather conditions to maximize production in the short term.
Brazil should push for the expansion of its sugar export quota to the US as part of broader trade negotiations. In addition, industry stakeholders should monitor the developments surrounding ethanol tariffs to identify strategic opportunities. By capitalizing on favorable export terms, Brazilian producers can stabilize domestic sugar prices and enhance their competitive position in global markets, especially as demand from the US increases.
Kazakhstan's sugar beet production has reached record levels, but limited processing capacity may hinder growth in the coming years. To maintain long-term growth, the government should expedite investments in processing infrastructure and modernize sugar plants to handle increased production. Stakeholders should also focus on improving logistics and transportation networks to ensure efficient sugar beet processing, helping stabilize the domestic market and enhance export opportunities.
Sources: Tridge, AgroSektor, Ukr AgroConsult, Noticias Agricolas, MVS Noticias, El Sol De Cuernavaca, Expreso, El Economista, La Gaceta, Arab News, Ukrainska Pravda
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