New York March World Sugar #11 (SBH26) closed Monday up +0.04 (+0.27%), and London March White Sugar #5 ICE (SWH26) closed up +0.80 (+0.19%).
Sugar prices rose on Monday as they continue to consolidate below one-month highs reached last Wednesday. Sugar is supported by recent news that India’s Food Ministry said it was considering raising the price of ethanol used for gasoline blending, which could encourage India’s sugar mills to divert more cane crushing toward ethanol production instead of sugar, thus reducing sugar supplies.
Sugar prices also have carryover support from Nov. 14, when India’s food ministry said it would allow mills to export 1.5 million tonnes of sugar in the 2025/26 season, down from previous estimates of 2 million tonnes. India introduced a quota system for sugar exports in 2022/23 after late rains reduced production and limited domestic supplies.
On the bearish side of sugar, the International Sugar Organization (ISO) last Monday forecast a sugar surplus of 1.625 million MT in 2025-26, after a deficit of 2.916 million MT in 2024-25. ISO said the surplus is due to increased sugar production in India, Thailand and Pakistan. In August, ISO had previously forecast a shortfall of 231,000 tonnes for the 2025-26 marketing year. ISO forecasts a +3.2% year-on-year increase in global sugar production to 181.8 million tonnes in 2025-26.
The prospects for strong global sugar supplies have weighed on sugar prices over the past month. On November 13, London sugar hit a 4.75-year low in futures (SWZ25), and on November 6, New York sugar prices fell to a 5-year low in futures (SBH26), mainly due to higher sugar production in Brazil and rumors of a global sugar surplus. On 5 November, sugar trader Czarnikow raised its global sugar surplus estimate for 2025/26 to 8.7 million tonnes, +1.2 million tonnes from a September estimate of 7.5 million tonnes.
The prospects for record sugar production in Brazil are bearish for prices. Conab, Brazil’s crop forecasting agency, on November 4 raised its 2025/26 Brazilian sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT. Unica recently reported that Central-South Brazil sugar production in the second half of October increased +16.4% year-on-year to 2,068 MT. In addition, the percentage of sugar cane crushed by Brazil’s sugar mills in the second half of October increased to 46.02% from 45.91% in the same period last year. Additionally, 2025-26 Central-South cumulative sugar production through October increased +1.6% year-on-year to 38.085 MMT.
Signs of a larger sugar crop in India, the world’s second-largest producer, are undercutting prices after the India Sugar Mill Association (ISMA) on November 11 raised its 2025/26 Indian sugar production estimate to 31 MMT from a previous forecast of 30 MMT, up +18.8% year-on-year. The ISMA also lowered its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, which could allow India to increase its sugar exports.
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 accumulated monsoon rainfall to date 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 Indian sugar production in 2024/25 to a 5-year low of 26.1 MMT, according to the Indian Sugar Mills Association (ISMA).
The prospects for increased sugar production in Thailand are bearish for prices. On October 1, Thai Sugar Millers Corp projected that Thailand’s sugar crop in 2025/26 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 third largest sugar producer in the world and the second largest exporter.
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’s 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 also predicted that India’s sugar production in 2025/26 would rise 25% year-on-year to 35.3 MMT, driven by favorable monsoon rains and rising sugar acreage. Additionally, 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
