Main Highlights
- Sugar futures prices experienced a decline, with London white sugar reaching a 4.25-year low.
- Anticipated global sugar surpluses from major producing countries like Brazil, India, and Thailand are exerting downward pressure on prices.
- This outlook for robust supplies is attributed to increased production forecasts in Brazil, favorable monsoon conditions potentially boosting India’s crop, and expected growth in Thailand’s output.
- Despite some forecasts of potential global deficits, current market sentiment is heavily influenced by expected ample supply.
March NY world sugar #11 (SBH26) futures concluded trading on Friday down by -0.30, representing a -1.90% change. Concurrently, December London ICE white sugar #5 (SWZ25) futures closed lower by -1.60, a -0.36% decrease.
💡 Market participants are closely watching these price movements as indicators of broader commodity trends.
Sugar prices settled lower on Friday, with London sugar marking a nearest-futures low not seen in 4.25 years. New York sugar, while also experiencing pressure, managed to stay above its three-week low recorded on Tuesday. The primary factor weighing on sugar prices is the outlook for robust global sugar supplies. On Monday, BMI Group projected a significant global sugar surplus of 10.5 million metric tons (MMT) for the 2025/26 period. This projection follows a similar forecast from Covrig Analytics last Tuesday, which anticipated a global sugar surplus of 4.1 MMT for 2025/25.
✅ These surplus projections are key drivers for current market sentiment.
Global Supply Dynamics Impacting Sugar Futures
Sugar prices have been under considerable pressure over the last seven months. New York sugar futures, specifically SBV25, reached a 4.5-year nearest-futures low last month, largely driven by indications of higher sugar output from Brazil. On Thursday, Unica reported that Brazil’s Center-South region saw a +10.8% year-over-year increase in sugar output during the latter half of September, reaching 3.137 MMT. Furthermore, the proportion of sugarcane crushed for sugar production by Brazilian mills in this period rose to 51.17%, up from 47.73% in the same period last year. Cumulatively, Center-South sugar output for the 2025-26 season through September increased by +0.8% year-over-year to 33.524 MMT.
📊 Brazil’s significant production capacity continues to be a major influence on global sugar markets.
The anticipated increase in sugar exports from India also presents a bearish outlook for prices. Generous monsoon rains across the country suggest the potential for a bumper sugar crop. As of September 30, India’s Meteorological Department reported cumulative monsoon rainfall at 937.2 mm, which is 8% above normal and the strongest monsoon in five years. On June 2, India’s National Federation of Cooperative Sugar Factories projected a substantial +19% year-over-year increase in India’s 2025/26 sugar production to 34.9 MMT, citing larger planted cane acreage. This follows a notable -17.5% year-over-year decline in India’s sugar production for 2024/25, which fell to a five-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).
📌 Understanding India’s production trends is crucial for forecasting global sugar availability.
Another bearish factor impacting sugar values comes from sugar trader Sucden. They suggest that India may allocate 4 MMT of its sugar production for ethanol in the 2025/26 season. However, this diversion is deemed insufficient to alleviate the country’s overall sugar surplus, potentially prompting Indian sugar mills to export as much as 4 MMT of sugar, exceeding earlier expectations of 2 MMT. India holds the position of the world’s second-largest producer of sugar.
⚡ The interplay between domestic consumption, ethanol production, and export potential in India significantly affects global sugar trade.
The outlook for increased sugar production in Thailand also contributes to bearish price sentiment. On October 1, the Thai Sugar Miller Corp projected that Thailand’s 2025/26 sugar crop would grow 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 ranks as the world’s third-largest sugar producer and the second-largest exporter of sugar.
📍 Thailand’s export capacity plays a vital role in balancing global sugar supply and demand.
Not all factors have been consistently bearish. Last Tuesday, New York sugar futures experienced a two-month high. This surge was attributed to signs of lower sugar content being extracted from Brazil’s current sugar crush, which sparked a brief period of short-covering activity in sugar futures. On October 2, Unica reported that the sugar content in Brazil’s Center-South sugarcane processed during the first half of September decreased to 154.58 kilograms per ton (kg/ton), compared to 160.07 kg/ton in the same period the previous year.
💡 Shifts in crop quality can introduce short-term volatility in commodity markets.
Conflicting Forecasts for Global Sugar Balance
Contrasting with some of the bearish supply outlooks, the International Sugar Organization (ISO) projected a global sugar deficit for the 2025/26 season in its August 29 report, which would mark the sixth consecutive year of such deficits. The ISO forecasts a global 2025/26 sugar deficit of -231,000 MT, a notable improvement from the -4.88 MMT shortfall experienced in 2024/25. The ISO also anticipates a +3.3% year-over-year rise in global sugar production to 180.6 MMT and a +0.3% year-over-year increase in global sugar consumption to 180.8 MMT for 2025/26.
📊 The ISO’s forecast indicates a potentially tighter global supply picture for the upcoming season.
However, the United States Department of Agriculture (USDA), in its bi-annual report released on May 22, offered a different perspective. The USDA projected that global 2025/26 sugar production would climb by +4.7% year-over-year to a record 189.318 MMT. Simultaneously, global human sugar consumption was expected to increase by +1.4% year-over-year to a record 177.921 MMT. The USDA also forecasted 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) specifically predicted that Brazil’s 2025/26 sugar production would increase by +2.3% year-over-year to a record 44.7 MMT. FAS further predicted India’s 2025/26 sugar production to rise by +25% year-over-year to 35.3 MMT, attributing this to favorable monsoon rains and expanded sugar acreage. For Thailand, FAS predicted a +2% year-over-year increase in 2025/26 sugar production to 10.3 MMT.
✅ The USDA’s projections suggest a record-breaking production year, potentially leading to higher stock levels.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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Expert Summary
Current sugar market trends are heavily influenced by expectations of substantial global surpluses, driven by strong production forecasts from key players like Brazil, India, and Thailand due to favorable agricultural conditions. While some organizations predict potential deficits, the prevailing sentiment points towards ample supply, leading to downward pressure on futures prices.