World sugar #11 for March in New York (SBH26) today was down -0.23 (-1.45%), and white sugar ICE #5 for December in London (SWZ25) was down -11.20 (-2.48%).
Sugar prices are under pressure today, but remain above the lows reached on Tuesday. On Tuesday, New York sugar fell to a three-week low and London sugar fell to a futures low closer to 4.25 years. The prospects for a strong global sugar supply are weighing on prices. On Monday, BMI Group projected a 2025/26 global sugar surplus of 10.5 MMT, and last Tuesday, Covrig Analytics projected a 2025/25 global sugar surplus of 4.1 MMT.
Sugar prices have been under pressure for the past seven months, with New York sugar last month hitting a 4.5-year low in nearer futures (SBV25) on signs of higher sugar production in Brazil. On October 2, Unica reported that Central-South Brazil sugar production in the first half of September increased +15.7% year-on-year to 3,622 MT. Furthermore, the percentage of sugar cane crushed by Brazil’s sugar mills in the second half of August increased to 53.49% from 47.74% in the same period last year. However, the 2025-26 cumulative Central-South sugar production through mid-September fell -0.1% year-on-year to 30.388 MMT.
The prospects for increased sugar exports from India are negative for sugar prices as abundant monsoon rains may produce a bumper sugar crop. On September 30, the India Meteorological Department reported that the cumulative monsoon rainfall in India as of September 30 was 937.2 mm, 8% above normal, marking the strongest monsoon in five years. On June 2, the National Federation of Indian Cooperative Sugar Factories projected that India’s sugar production in 2025/26 would rise +19% year-on-year to 34.9 MMT, citing higher cane planted area. This would follow a -17.5% year-on-year decline in India’s sugar production in 2024/25 to a five-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).
Another bearish factor for sugar was sugar trader Sucden’s recent claim that India could divert 4 million tonnes of sugar to produce ethanol in 2025/26, which is not enough to alleviate the country’s sugar surplus and may prompt Indian sugar mills to export up to 4 million tonnes of sugar, up from earlier expectations of 2 million tonnes. India is the second largest sugar producer in the world.
Prospects for higher sugar production in Thailand are bearish for prices after Thai Sugar Miller Corp projected on October 1 that Thailand’s 2025/26 sugar crop will increase +5% year-on-year to 10.5 MMT. On May 2, the Office of the Thai Cane and Sugar Board reported that Thailand’s sugar production in 2024/25 increased +14% year-on-year to 10.00 MMT. Thailand is the world’s third largest sugar producer and second largest sugar exporter.
Last Tuesday, New York sugar hit a two-month high as signs of lower sugar content from this year’s Brazilian sugar crushing sparked a brief bout of short covering in sugar futures. On October 2, Unica reported that the sugar content in crushed cane from South-Central Brazil in the first half of September fell to 154.58 kilograms per ton (kg/ton) compared to 160.07 kg/ton in the same period a year earlier.
On August 29, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficit. ISO projects a global sugar deficit in 2025/26 of -231,000 MT, down from the deficit of -4.88 MMT in 2024/25. ISO also projects that global sugar production in 2025/26 will increase +3.3% year-on-year to 180.6 MMT, and global sugar consumption in 2025/26 will increase +0.3% year-on-year to 180.8 MMT.
The USDA, in its semi-annual report released on May 22, projected that global sugar production in 2025/26 would increase +4.7% year-on-year to a record 189,318 MMT and that global human sugar consumption in 2025/26 would increase +1.4% year-on-year to a record 177,921 MMT. The USDA also forecast that global sugar ending stocks in 2025/26 would increase +7.5% year-on-year to 41.188 million tonnes. The USDA Foreign Agricultural Service (FAS) predicted that Brazil’s sugar production in 2025/26 would increase +2.3% year-on-year to a record 44.7 million tons. FAS predicted that India’s sugar production in 2025/26 would increase +25% year-on-year to 35.3 million tonnes due to favorable monsoon rains and increased sugar acreage. FAS predicted that Thailand’s sugar production in 2025/26 will increase +2% year-on-year to 10.3 MMT.
On the date of publication, Rich Asplund had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
