Key Takeaways
- Global sugar prices experienced a downturn, with both New York and London markets closing lower.
- Increased production forecasts from major sugar-producing nations like Brazil and India are exerting downward pressure on prices.
- Estimates suggest a larger global sugar surplus for the 2025/26 season, countering previous deficit projections.
- Higher projected sugar output from Brazil, India, and Thailand collectively contribute to a bearish market sentiment.
Market Movement
On Friday, March NY world sugar #11 futures (SBH26) settled down by 0.09 points, representing a 0.63% decrease. Similarly, December London ICE white sugar #5 futures (SWZ25) closed lower by 3.30 points, or 0.80%.
Sugar prices trended downward, with London sugar reaching a nearest-futures low not seen in 4.75 years. This price pressure is largely attributed to the outlook for robust global sugar supplies.
Earlier in the week, NY sugar prices had also fallen to a 5-year nearest-futures low. This was primarily driven by expectations of increased sugar output from Brazil and indications of a global sugar surplus.
💡 Trader Czarnikow revised its global sugar surplus estimate for the 2025/26 season upward to 8.7 million metric tons (MMT), an increase of 1.2 MMT from its September projection of 7.5 MMT.
Brazilian Sugar Production Outlook
The anticipation of record sugar output from Brazil is a significant bearish factor for sugar prices.
Brazil’s crop forecasting agency, Conab, raised its 2025/26 sugar production estimate for the country to 45 MMT, up from a previous forecast of 44.5 MMT.
Data from Unica indicated that Brazil’s Center-South sugar output in the first half of October increased by 1.3% year-over-year, reaching 2.484 MMT. Concurrently, the percentage of sugarcane crushed for sugar by Brazilian mills in the same period rose to 48.24%, compared to 47.33% last year.
Cumulative 2025-26 Center-South sugar output through mid-October saw a year-over-year increase of 0.9%, totaling 36.016 MMT.
📊 Industry analysis from Datagro on October 21 projected that Brazil’s Center-South sugar production for the 2026/27 season could climb by 3.9% year-over-year to a record 44 MMT.
Indian Sugar Market Factors
Signs pointing to a larger sugar crop in India, the world’s second-largest producer, are also contributing to downward price pressure.
The India Sugar Mill Association (ISMA) increased its 2025/26 India sugar production estimate to 31 MMT, an upward revision from an earlier forecast of 30 MMT and an anticipated 18.8% year-over-year increase.
Furthermore, ISMA reduced its estimate for sugar used in ethanol production in India to 3.4 MMT from a July forecast of 5 MMT. This adjustment could potentially free up more sugar for export.
âš¡ The prospect of higher sugar exports from India is considered negative for sugar prices, particularly as abundant monsoon rains suggest a strong harvest.
The India Meteorological Department reported on September 30 that cumulative monsoon rainfall was 937.2 mm, 8% above the normal average and the strongest monsoon in five years. This favorable weather could lead to a bumper sugar crop.
Data from India’s National Federation of Cooperative Sugar Factories on June 2 projected a significant increase in India’s 2025/26 sugar production, with an estimated rise of 19% year-over-year to 34.9 MMT, attributed to larger sugarcane planted acreage. This follows a reported year-over-year decline of 17.5% in India’s sugar production for 2024/25, which reached a five-year low of 26.1 MMT, according to ISMA.
📌 Another bearish factor emerged from sugar trader Sucden, which suggested that India might divert only about 4 MMT of sugar for ethanol production in the 2025/26 season. If this holds true, it might not be sufficient to alleviate the country’s sugar surplus, potentially prompting Indian sugar mills to export up to 4 MMT, exceeding earlier expectations of 2 MMT.
Thai Sugar Production and Global Forecasts
The outlook for increased sugar production in Thailand also adds bearish pressure to global prices.
The Thai Sugar Millers Corp projected on October 1 that Thailand’s 2025/26 sugar crop would increase by 5% year-over-year to 10.5 MMT. This follows a 14% year-over-year rise in Thailand’s 2024/25 sugar production to 10.00 MMT, as reported by Thailand’s Office of the Cane and Sugar Board on May 2. Thailand holds the position of the world’s third-largest sugar producer and the second-largest exporter.
📊 Earlier in the year, the International Sugar Organization (ISO) forecasted a global sugar deficit for the 2025/26 season on August 29, breaking a trend of six consecutive deficit years. ISO projected a global 2025/26 sugar deficit of -231,000 MT. This figure is significantly smaller than the -4.88 MMT shortfall forecasted for the 2024/25 season. ISO also anticipates a rise in global sugar production for 2025/26 by 3.3% year-over-year to 180.6 MMT, with global sugar consumption expected to increase by 0.3% year-over-year to 180.8 MMT.
The USDA, in its bi-annual report released on May 22, projected that global 2025/26 sugar production would climb by 4.7% year-over-year to a record 189.318 MMT. Global human sugar consumption was also forecasted to increase by 1.4% year-over-year to a record 177.921 MMT. The USDA further estimated that 2025/26 global sugar ending stocks would rise by 7.5% year-over-year to 41.188 MMT.
The USDA’s Foreign Agricultural Service (FAS) predicted Brazil’s 2025/26 sugar production would rise by 2.3% year-over-year to a record 44.7 MMT. FAS also anticipates India’s 2025/26 sugar production to increase by 25% year-over-year to 35.3 MMT, driven by favorable monsoon rains and increased sugar acreage. Additionally, FAS predicted Thailand’s 2025/26 sugar production to increase by 2% year-over-year to 10.3 MMT.
Expert Summary
Global sugar markets are currently under pressure from increased production forecasts across key producing nations, notably Brazil and India. Despite some earlier projections of deficits, revised estimates now point towards a greater supply and potential surplus for the upcoming season.
The bearish sentiment is reinforced by strong output expectations from Thailand as well. These factors collectively suggest continued downward pressure on sugar prices in the near term.
