At a Glance
- Sugar futures saw a sharp rise on Wednesday, with NY sugar reaching a one-week high.
- This increase was driven by reports suggesting India might export less sugar than initially forecast for the 2025/26 season.
- Despite the recent uptick, the global sugar market faces pressure from expectations of robust supplies, particularly from Brazil.
- Brazil’s 2025/26 sugar production estimates have been raised, and output in its Center-South region is already up year-on-year.
- India’s own production forecast for 2025/26 has also been revised upwards, potentially leading to increased export availability.
Sugar Market Dynamics: Recent Price Movements
March NY world sugar #11 futures closed up +0.27 (+1.89%) on Wednesday, reaching a one-week high. Concurrently, December London ICE white sugar #5 futures settled higher by +9.90 (+2.43%).
This rally in sugar prices was fueled by short-covering activity, spurred by indications that India might reduce its sugar exports for the upcoming season. Bloomberg reported that India’s food ministry is considering a proposal to allow mills to export 1.5 million metric tons (MMT) in the 2025/26 season, a figure below earlier expectations of 2 MMT. India had previously implemented an export quota system in 2022/23 to manage domestic supply following weather-related production impacts.
Global Supply Outlook and Price Pressures
The broader outlook for abundant global sugar supplies has exerted significant downward pressure on prices over the past month. London sugar recently hit a new 4.75-year nearest-futures low, while NY sugar prices had previously slumped to a 5-year nearest-futures low. These declines are primarily attributed to increased sugar output in Brazil and concerns about a global sugar surplus.
📈 Sugar trader Czarnikow revised its global 2025/26 sugar surplus estimate upwards to 8.7 MMT, a notable increase from its September estimate of 7.5 MMT.
Brazil’s Record Production Forecasts
The anticipation of record sugar output in Brazil continues to be a bearish factor for prices. Brazil’s crop forecasting agency, Conab, has raised its 2025/26 sugar production estimate to 45 MMT, up from a previous forecast of 44.5 MMT.
Data from Brazil’s Center-South region further supports this trend. In the first half of October, sugar output rose by 1.3% year-on-year to 2.484 MT. The proportion of sugarcane crushed for sugar also increased to 48.24% from 47.33% during the same period last year. Cumulatively, Center-South sugar production through mid-October for the 2025-26 season is up 0.9% year-on-year, reaching 36.016 MMT.
Further bolstering this outlook, Datagro projected on October 21 that Brazil’s Center-South sugar production for the 2026/27 season could climb by 3.9% year-on-year to a record 44 MMT.
India’s Production and Export Potential
Signs of a larger sugar crop in India, the world’s second-largest producer, are also influencing market sentiment. The India Sugar Mill Association (ISMA) recently increased its forecast for India’s 2025/26 sugar production to 31 MMT, an 18.8% year-on-year increase from an earlier projection of 30 MMT.
💡 Additionally, ISMA has reduced its estimate for sugar used in ethanol production to 3.4 MMT from a prior forecast of 5 MMT. This adjustment suggests a greater volume of sugar could be available for export.
The prospect of higher sugar exports from India could negatively impact global prices, especially with favorable monsoon rains potentially contributing to a bumper crop. As of September 30, India’s cumulative monsoon rainfall was 8% above normal, marking the strongest in five years. Earlier, on June 2, the National Federation of Cooperative Sugar Factories projected a 19% year-on-year increase in India’s 2025/26 sugar production to 34.9 MMT, citing expanded sugarcane acreage. This follows a significant decline of 17.5% year-on-year in India’s sugar production for the 2024/25 season, which hit a five-year low of 26.1 MMT, according to ISMA.
Thailand’s Increasing Sugar Output
The forecast for higher sugar production in Thailand also adds to the bearish sentiment. The Thai Sugar Millers Corp projected on October 1 that Thailand’s 2025/26 sugar crop will increase by 5% year-on-year to 10.5 MMT. This follows a 14% year-on-year rise in Thailand’s 2024/25 sugar production to 10.00 MMT, as reported by the 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.
International Organizations’ Forecasts
In contrast to the current market pressures, the International Sugar Organization (ISO) forecasted a global sugar deficit for the 2025/26 season on August 29, indicating the sixth consecutive year of shortfalls. The ISO projects a deficit of -231,000 MT for 2025/26, a reduction from the -4.88 MMT shortfall anticipated for 2024/25. The ISO also forecasts that global sugar production will 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.
USDA Projections for Global Sugar Market
The USDA, in its bi-annual report released on May 22, projected that global 2025/26 sugar production would reach a record 189.318 MMT, a 4.7% increase year-on-year. Global human sugar consumption was also forecast to hit a record 177.921 MMT, up 1.4% year-on-year.
📊 The USDA further predicted that 2025/26 global sugar ending stocks would rise by 7.5% year-on-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-on-year to a record 44.7 MMT. FAS also forecast India’s 2025/26 sugar production to grow by 25% year-on-year to 35.3 MMT, driven by favorable monsoons and increased planting. Additionally, FAS predicted Thailand’s 2025/26 sugar production to rise by 2% year-on-year to 10.3 MMT.
Final Thoughts
The sugar market is currently experiencing conflicting signals, with short-term price gains influenced by potential shifts in Indian export policy. However, the prevailing bearish sentiment is driven by robust production forecasts from major producing nations like Brazil and favorable weather conditions in India and Thailand.
