New York Sugar Week ended amid near five-year lows, but traders are watching two volatile levers: Brazilian fuel economics and El Niño’s potential hit to India’s cane. With Brazil’s large crops already pressuring raw sugar, mills may shift cane toward gasoline-related ethanol, depending on the “sugar mix.” Estimates range as low as 45% versus last year’s 50.4%. Petrobras has held gasoline prices steady despite broader gains, affecting ethanol demand. Separately, El Niño-driven dryness could influence India output, at a time when exports are already curtailed and restrictions are debated for 2026-27.
Indian sugar producer shares fell up to 7% on Thursday after the government prohibited sweetener exports, adding immediate pressure to an already strained market. Analysts linked the move to surging domestic sugar prices alongside weaker sugarcane expectations in Maharashtra and Karnataka, with El Nino seen as a risk for further shrinkage. While the ban is expected to weigh on near-term earnings, investors point to capacity expansions aimed at the government’s 20% ethanol blending targets as a medium-term support.
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India has imposed an immediate ban on sugar exports until September 30, 2026, or until further orders, and the market reacted sharply. Sugar stocks including Dalmia Bharat Sugar, Shree Renuka Sugars, Bannari Amman Sugars, EID Parry and others plunged on Thursday, with some names down several percentage points as traders reset expectations for revenue and supply flows.
India’s sugar exports for the 2025-26 season are projected to fall to around 7.5 to 8 lakh tonnes as weak global prices curb shipping demand. Government export quotas further limit overseas supply, while domestic consumption stays steady. With fewer exportable surpluses, the amount available for foreign markets is expected to remain subdued.
Sugar production has risen 7% year on year to 275.28 lakh tonnes as of April 30, according to ISMA. The surprise is that output increased even as the number of operational sugar mills fell sharply. Maharashtra and Karnataka led the stronger production performance, offering a clearer regional picture despite the mill decline.
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