Why sugar could prove a sweet investment in 2025

Why sugar could prove a sweet investment in 2025
Global supply glut outlook slashed by major producer.
MAY 16, 2025
By  Bloomberg

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

 

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave