New York March ICE No. 11 (SBH26) closed Wednesday down -0.04 (-0.27%), and London March White Sugar ICE No. 5 (SWH26) closed down -0.30 (-0.07%).
Sugar prices retreated from 3.5-week highs on Wednesday and closed lower after a drop in crude oil prices led to a long liquidation in sugar futures. West Texas Intermediate (CLZ25) prices fell more than -2% on Wednesday, undermining ethanol prices and potentially prompting the world’s sugar mills to shift more sugarcane crushing toward sugar production rather than ethanol, boosting sugar supplies.
Sugar prices initially rose on Wednesday thanks to a positive carryover from Tuesday, when India’s food ministry said it was considering increasing the price of ethanol used in gasoline blending, which could encourage India’s sugar mills to shift more sugarcane crushing toward ethanol production rather than sugar, thus reducing sugar supplies.
Sugar also enjoys a negative carryover from Monday when the International Sugar Organization (ISO) forecast a surplus of 1.625 million metric tons of sugar in 2025-26, after a deficit of 2.916 million metric tons in 2024-25. The International Organization for Standardization (ISO) said the surplus was driven by increased sugar production in India, Thailand and Pakistan. In August, ISO previously forecast a deficit of 231,000 metric tons for the 2025-26 marketing year. ISO expects a 3.2% year-on-year increase in global sugar production to 181.8 million metric tons in 2025-2026.
Sugar prices also received a boost since last Friday when India’s Food Ministry said it would allow mills to export 1.5 million metric tons of sugar in the 2025/26 season, less than previous estimates of 2 million metric tons. India introduced quotas for sugar exports in 2022/23 after late rains led to lower production and limited domestic supplies.
Strong global sugar supply expectations have weighed on sugar prices over the past month. Last Thursday, London sugar hit a new 4.75-year low for futures, and on November 6, New York sugar prices fell to a 5-year low, mainly due to rising sugar production in Brazil and talk of a global sugar surplus. Sugar trading company Czarnikow on November 5 raised its 2025/26 global sugar surplus estimate to 8.7 million metric tons, up +1.2 million metric tons from the September estimate of 7.5 million metric tons.
Expectations for record sugar production in Brazil point to lower prices. CONAP, Brazil’s crop forecasting agency, on November 4 raised its estimate for Brazil’s 2025/26 sugar production to 45 million metric tons from a previous forecast of 44.5 million metric tons. Unica recently reported that sugar production from central and southern Brazil in the second half of October rose by +16.4% year-on-year to 2,068 metric tons. The percentage of sugarcane crushed by sugar mills in Brazil increased in the second half of October to 46.02% from 45.91% in the same period last year. In addition, 2025-26 cumulative sugar production from the center and south during October rose +1.6% year-on-year to 38.085 million metric tons.
Signs of a bigger sugar crop in India, the world’s second-largest producer, are pushing down prices after the Indian Sugar Mills Association (ISMA) last Tuesday raised its estimate for India’s sugar production for 2025/26 to 31 million metric tons from a previous forecast of 30 million metric tons, up +18.8% year-on-year. ISMA also lowered its estimate for sugar used for ethanol production in India to 3.4 million metric tons from the July forecast of 5 million metric tons, which could allow India to boost its sugar exports.
The prospects for higher sugar exports from India are negative for sugar prices, as heavy monsoon rains may produce a bumper sugar crop. On September 30, the India Meteorological Department reported that cumulative monsoon rainfall as of that date was 937.2 mm, 8% above normal, representing the strongest monsoon in five years. On June 2, the National Federation of Cooperative Sugar Mills of India forecast that India’s sugar production for 2025/26 will rise +19% year-on-year to 34.9 million metric tons, citing increasing sugarcane area under cultivation. This will come after a -17.5% y-o-y decline in India’s sugar production in 2024/25 to a 5-year low of 26.1 million metric tons, according to the Indian Sugar Mills Association (ISMA).
The outlook for higher sugar production in Thailand is negative for prices. Thai Sugar Millers Corp on October 1 forecast that Thailand’s 2025/26 sugar crop would rise +5% year-on-year to 10.5 million metric tons. On May 2, the Office of the Cane and Sugar Board of Thailand reported that Thailand’s sugar production for 2024/25 rose +14% year-on-year to 10.00 million metric tons. Thailand is the world’s third largest sugar producer and second largest exporter.
In its semi-annual report issued on May 22, the USDA forecast that global sugar production in 2025/26 will increase +4.7% year-on-year to a record 189.318 million metric tons, and that global human sugar consumption in 2025/26 will increase +1.4% year-on-year to a record 177.921 million metric tons. The USDA also expects global sugar stocks to rise by the end of 2025/26 by +7.5% year-on-year to 41,188 million metric tons. The USDA’s Foreign Agricultural Service (FAS) expects Brazil’s sugar production in 2025/26 to rise 2.3% year over year to a record 44.7 million metric tons. FAS also expected India’s sugar production in 2025/26 to rise 25% year-on-year to 35.3 million metric tons, driven by favorable monsoon rains and increased sugar acreage. In addition, FAS forecasts that Thailand’s 2025/26 sugar production will increase by +2% year-on-year to 10.3 million metric tons.
On the date of publication, Rich Asplund had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data contained in this article are for informational purposes only. This article was originally published on parchart.com
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