Sugar Market Mixed on Brazil & India Data

SUGAR

March Sugar is lower this morning but inside the upper end of Friday’s range. The market extended a rally on Friday off ideas that low sugar prices are pushing Brazilian cane crushers increase ethanol production at the expense of sugar. The UNICA report came in somewhat bearish against expectations, but the market rallied despite that. Sugar production is following its seasonal decline but is still running ahead of year-ago. Sugar’s share of crush was fell to 46%, below 50% for the second straight period and down from a high of 55% in August. The CEO of the Brazilian sugar cane growers’ association Orplana said on Friday that farmers in the key center-south region are feeling the squeeze of low sugar prices and that they do not want to increase the size of their crops and could consider reducing their planted area. A representative of the Brazilian sugar producer Raizen, one of the world’s largest, said they have locked in prices for about half of the sugar volume it expects to produce in the 2026/27 crop. This could reduce additional hedge pressure. India’s National Federation of Cooperative Sugar Factories said Monday that the nation’s sugar mills producing have produced 1.05 million metric tons of sugar since the 2025/26 season began on October 1, up 48% from the same period last year. The group is forecasting total sugar production for season at 31.5 million tons, with consumption estimated at around 29 million tons, which they suggest cold allow for exports of 2-2.5 million. Last week the government allowed mills to export 1.5 million tons in the new season. The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) is forecasting the net output for 2025/26 at 30.95 million tons. The USDA Report on Friday put US 2025/26 sugar production in at 9.31 million short tons, down from 9.39 million in 2024/25, due to smaller production from beets. Beet sugar production was estimated at 5.21 million short tons versus 5.37 million in 2024/25, and cane sugar production was seen at 4.1 million, up from 4.02 million.

COCOA

March Cocoa is higher this morning after falling to its lowest level since February 2024 on Friday on reports that the Trump Administration will lift tariffs on certain agricultural products that cannot be grown in the US, such as cocoa. So far the reports have  been light on details, but the fact that Ecuador was mentioned as one of the countries that would see tariffs lifted is important because they are the third largest producer in the world. They are currently the main source of supply for ICE-certified cocoa stocks. On Friday, total cocoa stocks submitted to ICE warehouse fell by 3,634 to 1.767 million, their lowest since March 18. Of the 370,654 bags that were certified, 212,731 were from Ecuador. World Weather Inc. reports that says showers and thunderstorms continued to evolve infrequently in southern Ivory Coast, southern Ghana and in areas farther to the east across southernmost Nigeria to western Cameroon over the weekend. Not much change is expected through the next week to ten days. Showers and thunderstorms will continue to pop up, although their frequency and significance will be limited. Dry conditions are good for harvest. Traders will be looking to this week’s Ivory Coast port arrivals estimates, which could be released later this morning, to see if strong pace of the previous two weeks continued last week. Last week’s update showed 107,000 metric tons arriving for the week ending November 9, up from 90,000 the previous week and the highest since January 2023. Cumulative arrivals had reached 411,000 tons versus 455,000 a year prior and a five-year average of 462,000. Rabobank said last week that they expect cocoa prices to continue their decline into 2026 on global production increases and demand weakness. They suggested production could exceed consumption by 403,000 tons in 2026/27 season and an estimated surplus of 328,000 tons in 2025/26. They also pointed to investments in cocoa production in Latin America and Indonesia are stepping up production.

COTTON

March Cotton saw some light pressure overnight following Friday’s steep selloff in the wake of a bearish USDA supply/demand report, in which US and world production and ending stocks all came in above expectations. The report put US 2025/26 cotton production at 14.12 million bales versus an average trade expectation from a Bloomberg survey of 13.52 million (range 13.00-14.30 million) and 13.22 million in the September update. Average yield was raised to 919 pounds/acre from 861 in September. Exports came in at 12.2 million bales versus 12.08 million expected (range 11.60-13.00 million) and 12.00 in September. Ending stocks were 4.30 million bales versus 3.76 million expected (range 3.30-4.40 million) and 3.60 million in September. This put the stocks/use ratio at 30.9% versus 26.3% last month, 29.4% last year, and a five-year average of 26.4%. This is the highest the ratio has been since 2022/23, when it reached 32.1%. World 2025/26 production came in at 120.08 million bales versus 117.91 million expected (range 117-119 million) and 117.68 million in the September report. In addition to the increase in US production, China’s production was increased by 1 million bales to 335 million, and Brazil’s was increased by -0.5 million bales to 18.75 million. World 2025/26 domestic use was increased slightly to 118.88 million bales from 118.83 million in September versus expectations for a decline to 118.12 million. World ending stocks came in at 75.93 million bales versus 73.64 million expected (range 72.50-75.00 million) and 73.14 million in September. This put the world stocks/use ratio at 63.9% versus 61.6% in September, 62.6% last year, and a five-year average of 62.7%, the highest since 2022/23.

COFFEE

March Coffee gapped higher overnight after falling to its lowest level since October 29 on Friday. The market turned lower last week on announcements from the Trump Administration that tariffs on certain agricultural products not grown in the US would be lifted, including coffee. However, there has been no explicit mention of Brazil, which up until now has represented about 30% of US coffee imports. The new exemptions took effect retroactively at midnight on Thursday. Cecafe said it was unclear whether the tariff cut applied to the baseline 10% tariff, the 40% additional tariff enacted in August, or both. Brazil’s Vice President Geraldo Alckmin said on Saturday that he welcomed the US decision to roll back the tariffs and said that Brazil will work to reduce the tariffs further, but he also said a significant portion of Brazil’s exports continues to be subject to the additional tariff imposed in August. The trade is also awaiting a decision by the US Supreme Court over the legality of some or all of the tariffs. Safras & Mercado said Friday that Brazil’s coffee crop could reach a record 71 million bags in 2026/27, in its first estimate for the upcoming harvest. Arabica coffee production was pegged at 46.70 million bags, up 21.8% from 2025/26 but below the record of 50 million+ from 2020. This will be the “on-year” in Brazil’s biennial arabica cycle. Robusta production was estimated at 24.30 million bags, down 6% from 2025/26. Safras also estimated Brazil’s 2025/26 coffee crop at 64.25 million bags, which was up from their previous forecast of 63.35 million bags. World Weather Inc, said Brazil rainfall was relatively light and scattered over the weekend, leaving many areas drier than usual. The added that all of Brazil will get rain during the coming two weeks. Amounts in the south are expected to gradually become lighter and less frequent, but no area will be too dry or too wet. ICE certified stocks fell  240 bags on Friday to 403,190, the lowest since March 6, 2024. Stocks fell 14,288 bags last week.

Interested in more futures markets?  Explore our Market Dashboards here.