by Ilena Peng
The world’s biggest sugar trader slashed its forecast for a global surplus in the coming season, cautioning that the market was underestimating risks from weather and transportation in top grower Brazil.
Worldwide output in 2025-26 is now expected to outstrip demand by just 400,000 tons, down from expectations for a glut of around 1.5 million tons two months ago, Alvean said in a presentation at New York Sugar Week. For the season ending September 2025, it forecasts a 5.5-million-ton shortage.
Raw-sugar futures hit the lowest since 2021 earlier this month, as traders looked ahead to a potential excess of supply. The estimates from Alvean for 2025-26 are at the lower end of figures shared at the industry gathering, with some analysts and traders flagging expectations for much larger gluts.
“There’s a bit of complacency on the optimism on the production side and how much it can recover,” Mauro Virgino, Alvean’s head of trading intelligence, said in an interview. That’s as “in the last seven years, what we had was more disappointment than positive surprises,” Virgino said.
Brazil’s Center-South region is expected to produce 40.9 million tons in 2025-26, though that could fall to 39.2 million tons if yields disappoint, Virgino said. The region is expected to process 593 million tons of cane as a base-case, already down nearly 5% on-year. That could drop to just 575 million tons, after yields in April and May were lower than expected, in part because of dryness.
Shipping out of Brazil has also been a “very well-oiled engine” recently, allowing consuming countries to “operate on a ‘just-in-time’ demand type of market,” with low stockpiles, he said. “The norm is there should be hiccups.”
Alvean’s forecast for a small global surplus hinges on a recovery in Asian supply. India is expected to produce 31 million tons in 2025-26, up 19%. Thai output is forecast to rise 1 million tons to 11.1 million.
“I think the negative surprises could come from Asia,” Virgino said. “We have a lot of weather to happen, you know, we’re assuming a very large increase.”
Alvean sees prices remaining between 17 and 20 cents a pound, assuming good weather in Asia and Brazilian output of 41.5 million tons. Any disruptions, however, could lead to a range of 19 to 24 cents.
Copyright Bloomberg News
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