Main Highlights
- Global sugar prices are experiencing downward pressure due to anticipated robust supply increases from key producing nations.
- Brazil and India are projected to significantly boost their sugar output in the upcoming 2025/26 season, contributing to a global surplus.
- Revised surplus estimates by sugar traders and forecasting agencies point to a larger-than-expected global sugar surplus for 2025/26.
- While some organizations project deficits, broader industry forecasts and country-specific production data indicate ample supply.
Global Sugar Markets Face Downward Pressure
Global sugar markets are currently trading lower, with both New York and London benchmarks exhibiting declines. March WTI crude oil sugar #11 futures are down, alongside December London ICE white sugar #5. This downturn is primarily driven by expectations of strong global sugar supplies, which are undermining current price levels.
Outlook for Robust Global Sugar Supplies
The prevailing sentiment in the sugar market is one of ample supply, leading to price weakness. Recent reports and forecasts from major sugar-producing regions suggest a surplus developing, contrasting with some earlier projections of deficits.
Brazil’s Anticipated Record Sugar Output
Brazil, a pivotal player in the global sugar market, is poised for a record sugar production year. Conab, Brazil’s national crop agency, has revised its 2025/26 sugar production estimate upwards to 45 MMT from a prior 44.5 MMT. This follows reports that Brazil’s Center-South region’s sugar output in the first half of October increased by 1.3% year-over-year, with a greater proportion of sugarcane being processed for sugar.
Data from Unica indicates that cumulative Center-South sugar output through mid-October reached 36.016 MMT, a slight increase from the previous year. Furthermore, Datagro projects that Brazil’s Center-South production will climb by 3.9% in the 2026/27 season to a record 44 MMT.
India’s Growing Sugar Production Potential
Signs of an expanding sugar crop in India, the world’s second-largest producer, are also contributing to the bearish market sentiment. The India Sugar Mill Association (ISMA) has raised its 2025/26 production estimate to 31 MMT, an 18.8% increase year-over-year. A revised lower estimate for sugar diversion to ethanol production may also lead to increased sugar exports from India.
💡 Abundant monsoon rains in India, with rainfall reportedly 8% above normal for the season, are supporting the outlook for a bumper sugar crop. This comes after a significant decline in India’s sugar production in the 2024/25 season, which reached a five-year low.
Sugar trader Sucden suggests India might divert only 4 MMT for ethanol in 2025/26, potentially freeing up as much as 4 MMT for export, exceeding initial expectations.
Thailand’s Increasing Sugar Yields
Thailand, a significant sugar producer and exporter, is also expected to see increased sugar output. The Thai Sugar Millers Corp projects a 5% year-over-year increase in the 2025/26 sugar crop, reaching 10.5 MMT. This follows a 14% rise in production in the 2024/25 season.
Divergent Global Supply Forecasts
While recent production data and projections from key countries point towards a surplus, some international organizations have forecasted deficits. The International Sugar Organization (ISO) had previously projected a deficit for the 2025/26 season, albeit a reduced one compared to the previous year. ISO’s forecast included a modest increase in global sugar production.
The USDA, in its May report, offered a more bullish outlook, anticipating record global sugar production and consumption for the 2025/26 season. The USDA’s projections also indicated a rise in global sugar ending stocks and significant production increases for Brazil, India, and Thailand.
Expert Summary
Market sentiment for sugar remains subdued due to forecasts of substantial increases in production from major global suppliers like Brazil and India. These upward revisions in output, coupled with potential for higher exports, are outweighing earlier predictions of a global deficit, leading to price pressure in the futures markets.
