Today New York March Sugar #11 (SBH26) is up +0.30 (+2.11%), and December London ICE White Sugar #5 (SWZ25) is up +9.70 (+2.38%).
Sugar prices rose sharply today, with sugar in New York hitting a one-week high. Short covering in sugar futures emerged today amid signs that India may export less sugar than initially expected, with Bloomberg reporting that India’s food ministry is considering a proposal to allow sugar mills to export 1.5 million metric tons in the 2025/26 season, below previous estimates of 2 million metric tons. India introduced quotas for sugar exports in 2022/23 after late rains reduced production and limited domestic supplies.
Strong global sugar supply expectations have weighed on sugar prices over the past month. On Monday, London sugar hit a new 4.75-year low for futures contracts, and last Thursday, 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. Last Wednesday, sugar trader Czarnikow 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. Last Tuesday, CONAP, Brazil’s crop forecasting agency, 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. Sugar production from central and southern Brazil in the first half of October rose by +1.3% year-on-year to 2,484 metric tons, Unica reported last Thursday. The percentage of sugarcane crushed by sugar mills in Brazil in the first half of October also rose to 48.24% from 47.33% in the same period last year. In addition, 2025-26 cumulative sugar production from the center and south through mid-October rose +0.9% year-on-year to 36,016 million metric tons. In related news, Datagro forecast on October 21 that 2026/27 sugar production in central and southern Brazil will rise +3.9% year-on-year to a record 44 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) on 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.
The International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season on August 29, marking the sixth consecutive year of deficit. The ISO forecasts a global sugar deficit in 2025/26 of -231,000 MT, down from a deficit of -4.88 MT in 2024/25. ISO also expects global sugar production in 2025/26 to rise +3.3% y/y to 180.6 million metric tons, and global sugar consumption in 2025/26 will increase +0.3% y/y to 180.8 million metric tons.
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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