At a Glance
- Global sugar prices reached three-week highs driven by tighter Indian supply forecasts.
- India’s edible oil ministry will permit 1.5 MMT of sugar exports for the 2025/26 season, below earlier expectations.
- Recent bearish sentiment stemmed from robust production outlooks in Brazil and a projected global sugar surplus.
- Brazil’s crop forecasting agency raised its 2025/26 sugar production estimate, with strong output reported in the Center-South region.
- Revised estimates suggest increased sugar production in India and Thailand, potentially boosting global supply.
Global Sugar Market Dynamics
March contracts for both New York’s World Sugar #11 and London’s ICE White Sugar #5 saw significant gains on Friday, closing up 3.60% and 3.20% respectively. These rallies propelled sugar prices to three-week highs, primarily influenced by tighter supply expectations from India.
India’s Ministry of Food announced that mills would be permitted to export 1.5 million metric tons (MMT) of sugar during the 2025/26 season. This figure is notably lower than the previously anticipated 2 MMT, contributing to the upward pressure on prices. It’s worth noting that India implemented a quota system for sugar exports in the 2022/23 season following reduced production due to late rainfall impacting domestic availability.
Shifting Market Sentiment
The broader market sentiment over the past month had been bearish, characterized by expectations of a robust global sugar supply. This outlook had previously pushed prices to multi-year lows, with London sugar hitting a 4.75-year nearest-futures low and New York sugar reaching a 5-year nearest-futures low just days prior. These declines were largely attributed to increased sugar output from Brazil and forecasts of a global sugar surplus.
📊 Sugar trader Czarnikow revised its global 2025/26 sugar surplus estimate upwards to 8.7 MMT, an increase of 1.2 MMT from its September projection of 7.5 MMT. This adjustment underscored the prevailing concerns about oversupply.
Brazil’s Dominant Production Outlook
The outlook for record sugar production in Brazil continues to exert a bearish influence on prices. Conab, Brazil’s national crop forecasting agency, recently increased its 2025/26 sugar production estimate to 45 MMT, up from a prior forecast of 44.5 MMT. This revision points towards continued strong performance from the world’s largest sugar producer.
Data from Unica highlighted significant activity in Brazil’s Center-South region. Sugar output in the latter half of October surged by 16.4% year-over-year, reaching 2.068 million metric tons (MT). Concurrently, the percentage of sugarcane crushed for sugar production in this region saw a slight uptick to 46.02%, compared to 45.91% during the same period last year. Cumulative sugar output in the Center-South region through October for the 2025-26 season rose by 1.6% year-over-year to 38.085 MMT.
Further bolstering the bullish production narrative for Brazil, Datagro projected on October 21 that the 2026/27 sugar production in Brazil’s Center-South region could climb by 3.9% year-over-year to a record 44 MMT.
India’s Production and Export Landscape
Signs of a larger sugar crop in India, the world’s second-largest producer, are also impacting prices. The India Sugar Mill Association (ISMA) revised its 2025/26 India sugar production estimate upwards to 31 MMT from an earlier forecast of 30 MMT, representing an 18.8% year-over-year increase. This higher production outlook suggests a potentially more abundant supply entering the market.
âš¡ Additionally, ISMA reduced its forecast for sugar used in ethanol production in India to 3.4 MMT, down from a July estimate of 5 MMT. This reduction could free up additional sugar for export, further influencing global supply dynamics.
Meanwhile, the outlook for higher sugar exports from India presents a mixed picture. Abundant monsoon rains have raised expectations for a bumper sugar crop. Data from India’s Meteorological Department as of September 30 indicated cumulative monsoon rainfall of 937.2 mm, which is 8% above normal and marks the strongest monsoon in five years. This favorable weather pattern has led to upward revisions in production estimates.
Earlier in June, India’s National Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar production would surge by 19% year-over-year to 34.9 MMT, citing increased sugarcane acreage. This potential surge follows a significant decline of 17.5% year-over-year in India’s sugar production for the 2024/25 season, which reached a five-year low of 26.1 MMT, according to ISMA.
Thailand’s Contribution to Global Supply
The outlook for increased sugar production in Thailand also points towards a bearish trend for prices. The Thai Sugar Millers Corp projected on October 1 that Thailand’s 2025/26 sugar crop will rise by 5% year-over-year to 10.5 MMT. This follows a notable increase of 14% year-over-year in Thailand’s 2024/25 sugar production, which reached 10.00 MMT.
Thailand holds a significant position in the global sugar market as the world’s third-largest producer and the second-largest exporter, making its production levels a key factor in global supply dynamics.
International Sugar Organization and USDA Projections
In contrast to some of the more bearish indicators, the International Sugar Organization (ISO) had previously forecasteda global sugar deficit for the 2025/26 season in its August 29 report, which would have marked the sixth consecutive year of deficits. The ISO projected a global 2025/26 sugar deficit of -231,000 metric tons (MT), a reduction from the -4.88 MMT shortfall anticipated for the 2024/25 season. The ISO also projected that 2025/26 global sugar production would rise by 3.3% year-over-year to 180.6 MMT, while global sugar consumption was expected to increase by 0.3% year-over-year to 180.8 MMT.
The USDA, in its bi-annual report released on May 22, provided different projections. The USDA forecast 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 projected to increase by 1.4% year-over-year to a record 177.921 MMT. Consequently, the USDA predicted that 2025/26 global sugar ending stocks would rise by 7.5% year-over-year to 41.188 MMT.
Within these USDA projections, the Foreign Agricultural Service (FAS) predicted Brazil’s 2025/26 sugar production to increase by 2.3% year-over-year to a record 44.7 MMT. FAS also predicted India’s 2025/26 sugar production to increase by 25% year-over-year to 35.3 MMT, driven by favorable monsoon rains and expansion in sugar acreage. Furthermore, FAS anticipated Thailand’s 2025/26 sugar production to rise by 2% year-over-year to 10.3 MMT.
Final Thoughts
The global sugar market is currently navigating a complex interplay of supply-side factors. While recent export quotas from India have provided a short-term boost to prices, the underlying bearish pressures from strong production outlooks in Brazil, India, and Thailand, alongside significant global surplus projections, continue to shape market sentiment.
