At a Glance
- Global sugar prices show mixed performance, with New York futures hitting a 4.5-year low while London futures saw a modest gain.
- Increased sugar production forecasts from major producers like Brazil are putting downward pressure on market prices.
- India’s potential for a larger harvest, aided by favorable monsoons, could lead to increased exports and influence global supply dynamics.
- Favorable weather conditions in Thailand also point to a rise in sugar output for the upcoming season.
- Conflicting projections from organizations like the ISO and USDA highlight differing views on the global sugar supply balance for future seasons.
Market Dynamics and Price Pressures
The sugar market experienced a divergence in performance recently, with March NY world sugar #11 futures declining by -0.14 (-0.92%) and December London ICE white sugar #5 futures increasing by +1.10 (+0.25%). This mixed trading session saw New York sugar futures reach a fresh 4.5-year low.
Sugar prices have faced considerable downward pressure over the past seven months. London sugar futures had previously touched a 4.25-year low attributed to projections of higher sugar output from Brazil. Unica reported that Brazil’s Center-South region’s sugar output in the latter half of September rose by 10.8% year-on-year, reaching 3.137 million metric tons (MT). Simultaneously, the proportion of sugarcane crushed for sugar in Brazil’s mills during this period increased to 51.17%, up from 47.73% in the prior year. Cumulatively, Brazil’s 2025-26 Center-South sugar output through September showed a slight year-on-year increase of 0.8%, totaling 33.524 million metric tons (MMT).
Global Supply Outlook Shapes Market Trends
The broader expectation of robust global sugar supplies continues to exert downward pressure on prices. Market consultant Datagro has forecasted a significant increase in Brazil’s Center-South sugar production for the 2026/27 season, projecting a year-on-year rise of 3.9% to a record 44 MMT. Further reinforcing this outlook, BMI Group anticipates a global sugar surplus of 10.5 MMT for the 2025/26 season, while Covrig Analytics projected a similar surplus of 4.1 MMT for the 2025/25 period.
India’s Production Surge and Export Potential
The potential for increased sugar exports from India is also acting as a bearish factor in the global sugar market. Abundant monsoon rains across India suggest the possibility of a substantial sugar harvest. Data from India’s Meteorological Department as of September 30 indicated that cumulative monsoon rainfall was 937.2 mm, which is 8% above the normal average and represents the strongest monsoon in five years. In response to these favorable weather patterns, India’s National Federation of Cooperative Sugar Factories projected on June 2 that the country’s 2025/26 sugar production could surge by 19% year-on-year to 34.9 MMT, driven by an expansion in planted sugarcane acreage. This follows a notable decline of 17.5% year-on-year in India’s sugar production for the 2024/25 season, which reached a five-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).
An additional bearish consideration for sugar prices comes from sugar trader Sucden’s assessment that India may divert 4 MMT of sugar for ethanol production in the 2025/26 season. This volume may not be sufficient to absorb the country’s projected sugar surplus, potentially prompting Indian sugar mills to export as much as 4 MMT, which exceeds earlier estimates of 2 MMT. India holds the position of the world’s second-largest sugar producer.
Thailand’s Contribution to Global Sugar Output
Thailand’s anticipated increase in sugar production for the 2025/26 season is also viewed as a bearish signal for market prices. On October 1, the Thai Sugar Miller Corp projected that Thailand’s 2025/26 sugar crop will increase by 5% year-on-year to 10.5 MMT. This follows a significant 14% year-on-year rise in Thailand’s 2024/25 sugar production, which reached 10.00 MMT, as reported by Thailand’s Office of the Cane and Sugar Board on May 2. Thailand is recognized as the world’s third-largest sugar producer and the second-largest sugar exporter, making its production levels significant for global supply.
Divergent Global Supply Forecasts
Amidst these projections of expanding supply, forecasts regarding global sugar balances present a complex and varied picture. On August 29, the International Sugar Organization (ISO) forecasted a global sugar deficit for the 2025/26 season, which would mark the sixth consecutive year of deficits. The ISO projects this deficit to be 231,000 MT, a substantial reduction from the 4.88 MMT shortfall anticipated for 2024/25. The ISO also anticipates global sugar production to rise by 3.3% year-on-year to 180.6 MMT in 2025/26, while global sugar consumption is expected to increase by 0.3% year-on-year to 180.8 MMT.
In contrast, the USDA, in its bi-annual report released on May 22, projected that global 2025/26 sugar production would climb by 4.7% year-on-year to a record 189.318 MMT. The USDA also forecast global human sugar consumption to increase by 1.4% year-on-year to a record 177.921 MMT for the same period. The USDA’s projections indicated a 7.5% year-on-year rise in global sugar ending stocks for 2025/26, reaching 41.188 MMT. Specifically, the USDA’s Foreign Agricultural Service (FAS) predicted Brazil’s 2025/26 sugar production to advance by 2.3% year-on-year to a record 44.7 MMT. FAS further predicted India’s 2025/26 sugar production to surge by 25% year-on-year to 35.3 MMT, driven by favorable monsoon rains and increased sugar acreage. Thailand’s 2025/26 sugar production is also expected to grow by 2% year-on-year to 10.3 MMT, according to FAS.
Expert Market Summary
The global sugar market is currently influenced by mixed signals, with prevailing price sentiment reflecting expectations of increased production from key agricultural economies. While current market trends are largely bearish due to these supply projections, differing outlooks from major forecasting bodies highlight the inherent volatility and complexity of anticipating future market balances.