Quick Summary
- Sugar futures experienced significant declines, with London ICE white sugar hitting a 4.25-year low.
- Projections point to a global sugar surplus for the 2025/26 season due to increased production in key countries.
- Brazil’s Center-South sugar output saw a year-over-year increase, driven by higher sugarcane crushing for sugar.
- India’s monsoon rains are expected to boost its sugar crop, potentially leading to increased exports despite ethanol diversion plans.
- Thailand is also forecasting a rise in its sugar crop for the upcoming season.
March NY world sugar #11 futures (SBH26) saw a decline of -0.27 (-1.71%) today. Similarly, December London ICE white sugar #5 futures (SWZ25) traded down -4.20 (-0.95%). 💡 This downward trend reflects the broader pressure on sugar prices in recent trading sessions.
Sugar prices are experiencing sharp downward pressure today, with London sugar reaching a fresh 4.25-year nearest-futures low. New York sugar is holding steady above its previous three-week low. This market movement is largely attributed to the outlook for robust global sugar supplies, which is weighing heavily on prices. 📊 On Monday, BMI Group projected a significant global sugar surplus of 10.5 MMT for the 2025/26 season. This forecast was further supported by Covrig Analytics, which projected a global sugar surplus of 4.1 MMT for the 2025/25 period. 📌
The sugar market has been under considerable pressure over the past seven months. New York sugar (SBV25) previously fell to a 4.5-year nearest-futures low last month, driven by indications of higher sugar output from Brazil. ⚡ On Thursday, Unica reported that Brazil’s Center-South sugar production during the second half of September increased by 10.8% year-over-year, reaching 3.137 million metric tons (MT). Furthermore, the proportion of sugarcane crushed for sugar by Brazil’s mills in the latter half of September rose to 51.17%, up from 47.73% during the same period last year. Cumulatively, Center-South sugar output for the 2025-26 season through September saw a modest year-over-year increase of 0.8%, totaling 33.524 MMT. ✅
The prospect of increased sugar exports from India also presents a bearish factor for prices. Abundant monsoon rains across the country may result in a bumper sugar crop. 📍 Reports from India’s Meteorological Department on September 30 indicated that cumulative monsoon rainfall as of that date stood at 937.2 mm, which is 8% above the normal average, marking the strongest monsoon in five years. On June 2, India’s National Federation of Cooperative Sugar Factories projected that the country’s 2025/26 sugar production would climb by 19% year-over-year to 34.9 MMT, citing larger planted cane acreage. This forecast follows a significant -17.5% year-over-year decline in India’s sugar production for the 2024/25 season, which reached a five-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA). 💡
Adding to the bearish sentiment, sugar trader Sucden recently suggested that India might divert approximately 4 MMT of sugar to produce ethanol in the 2025/26 season. While this diversion is substantial, it is considered insufficient to alleviate the country’s sugar surplus entirely. Consequently, this situation could prompt Indian sugar mills to export as much as 4 MMT of sugar, a figure higher than earlier expectations of 2 MMT. India holds the position of the world’s second-largest producer of sugar. 📊
The outlook for increased sugar production in Thailand is also contributing to bearish price pressures. On October 1, the Thai Sugar Miller Corp projected that Thailand’s 2025/26 sugar crop would increase by 5% year-over-year to 10.5 MMT. This follows a marked rise in Thailand’s 2024/25 sugar production, which increased by 14% year-over-year to 10.00 MMT, as reported by Thailand’s Office of the Cane and Sugar Board on May 2. Thailand is recognized as the world’s third-largest sugar producer and the second-largest exporter of sugar. ⚡
In a brief period of short-covering activity seen in sugar futures last Tuesday, New York sugar reached a two-month high. This surge was triggered by indications of lower sugar content in this year’s Brazilian sugar crush. 📌 On October 2, Unica reported that the sugar content in Brazil’s Center-South sugarcane crushed during the first half of September decreased to 154.58 kilograms per ton (kg/ton), compared to 160.07 kg/ton in the corresponding period of the previous year. 💡
Contrary to current surplus projections, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season on August 29, which would mark the sixth consecutive year of deficits. The ISO projects a global 2025/26 sugar deficit of -231,000 MT, a notable decrease from the -4.88 MMT shortfall experienced in the 2024/25 season. Furthermore, the ISO anticipates that global sugar production will rise by 3.3% year-over-year to 180.6 MMT, while global sugar consumption is expected to increase by 0.3% year-over-year to 180.8 MMT in 2025/26. ✅
The United States Department of Agriculture (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. The USDA also forecasts that global human sugar consumption would increase by 1.4% year-over-year to a record 177.921 MMT for the same period. Additionally, the USDA 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) predicted that Brazil’s 2025/26 sugar production would increase by 2.3% year-over-year to a record 44.7 MMT. FAS also predicted that India’s 2025/26 sugar production would see a substantial rise of 25% year-over-year to 35.3 MMT, attributed to favorable monsoon rains and increased sugar acreage. For Thailand, FAS predicted that 2025/26 sugar production will climb by 2% year-over-year to 10.3 MMT. 📊
Expert Summary
Global sugar markets are currently facing downward pressure due to strong supply signals from major producing nations like Brazil, India, and Thailand. While some organizations forecast deficits, current projections from BMI, Covrig, and the USDA point towards a significant global sugar surplus for the upcoming 2025/26 season, impacting futures prices.