Brazil & India Sugar Production Prospects Improving

COCOA

September Cocoa traded in the upper end of the Monday’s range overnight, and for the second session in a row it is attempting to take out Monday’s high. Last week the market sold off hard on low grind data from Asia and Europe, but it managed to bounce when the North American numbers were not as dire. Data from the Ivory Coast Coffee and Cocoa Council (CCC) showed cocoa arrivals for 2024/25 had reached 1.579 million metric tons by June 30, up 3.3% from the same period last season.  This is a slower pace than what was indicated in the weekly arrivals numbers, which came to 1.613 million as of June 29. (The weekly numbers unofficial estimates based on exporter surveys.) Arrivals since January 1 totaled 554,897 tons, down 23.1% from 721,893 tons in the same period in 2024. The 2024/25 harvest started out strong but slowed down as the dry conditions from last year were felt. Better rains this spring have boosted expectations for 2025/26, but the market is still guarded. Recent dry weather is viewed as beneficial, and growers interviewed by Reuters this week were mostly upbeat about the main crop’s prospected.

COFFEE

Brazil’s harvest continues to run behind the average pace, with Cooxupe, the nation’s largest coffee co-operative, saying yesterday that its farmers had harvested 59% of their expected 2025 crop as of July 18, up from 49.3% in the previous week but below the 67.7% reported at the same time last year. Reuters reported that a crop tour of coffee-growing areas in Vietnam, conducted by Artis Trading in collaboration with the Coffee Trading Academy, indicated that the nation’s production would increase by 7% in the 2025/26 season that starts in October, citing favorable weather, active application of fertilizers and irrigation usage, and good husbandry practices, such as pruning and the replacement of old trees. This forecast is in line with USDA report in May that called for a 6.9% increase.

COTTON

The US cotton crop is in good shape and is getting better each week, with US crop conditions this week showing 57% rated good/excellent versus a five-year average of 48%. The biggest producing state, Texas, which represents 57% of US planted area, was 52% G/E versus 34% on average. West Texas weather looks supportive for growth, with hot temperatures and normal to above normal rainfall in the 6-10 and 8-14-day forecasts. Only 3% of US cotton production was in an area experiencing drought last week. The US supply/demand setup shows the US stocks/use ratio for 2025/26 at 32.4%, which would be the highest since 2019/20. The US export 88% of its output, and it has lost market share to Brazil in recent years.

SUGAR

Dry conditions this month in Brazil are expected to spark a recovery in center-south sugar production after their low showings in June. Despite drier than normal conditions in southern India, strong monsoon rains over the rest of the cane growing regions this year have raised expectations for this year’s cane crop and for India to be an exporter of sugar in 2025/26. India had received 374 millimeters of rains so far this monsoon season as of July, 6% above the normal amount of 351.7 millimeters, according to India Meteorological Department.

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