March NY World Sugar #11 (SBH26) is down -0.22 (-1.47%) today. March London ICE White Sugar #5 (SWH26) is down -6.90 (-1.57%).
Higher global sugar production is weighing on prices. On Wednesday, Unica reported that Brazil’s cumulative 2025-26 centre-south sugar production through December rose +0.9% year on year to 40.222 MMT. Also, the ratio of cane crushed to sugar increased from 48.16% in 2024/25 to 50.82% in 2025/36.
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On Monday, the India Sugar Mills Association (ISMA) reported that India’s 2025-26 sugar production is +22% y/y to 15.9 MMT from October 1 to January 15. ISMA on November 11 raised its 2025/26 India sugar production forecast to 31 MMT from an earlier forecast of 30 MMT, up +18.8% year-on-year. ISMA cut its estimate of sugar used for ethanol production in India to 3.4 MMT from July’s forecast of 5 MMT, which could give India a boost to its sugar exports. India is the second largest sugar producer in the world.
Sugar prices have been under pressure amid prospects of more sugar exports from India after India’s food secretary said the government may allow additional sugar exports to ease domestic supply overhang. In November, India’s food ministry said it would allow mills to export 1.5 MMT of sugar in the 2025/26 season. India introduced a quota system for sugar exports in 2022/23 after late rains reduced production and limited domestic supplies.
The possibility of a global sugar surplus is weighing on prices. Last Monday, Kovrig Analytics raised its 2025/26 global sugar surplus forecast to 4.7 MMT from October’s 4.1 MMT. However, Kovrig forecasts the 2026/27 global sugar surplus to fall to 1.4 MMT, as weak prices discourage production.
Prices are likely to remain subdued due to record sugar production in Brazil. Brazil’s crop forecasting agency Conab on November 4 raised its Brazil 2025/26 sugar production forecast to 45 MMT from a previous forecast of 44.5 MMT.
Excessive long positions in London ICE white sugar futures could exacerbate any price declines. Last Friday’s Weekly Commitment of Traders (COT) report showed that funds increased their white sugar net long positions by 4,544 to a record 48,203 (data from 2011).
The possibility of lower future sugar supply from Brazil is a supporting factor for prices. Consulting firm Safras & Mercado said on December 23 that Brazilian sugar production in 2026/27 will fall -3.91% to 41.8 MMT from an expected 43.5 MMT in 2025/26. The firm expects Brazil’s sugar exports to decline -11% to 30 MMT in 2026/27.
On the bearish side for sugar, the International Sugar Organization (ISO) on November 17 has projected a sugar surplus of 1.625 million metric tonnes in 2025-26, after a deficit of 2.916 million metric tonnes in 2024-25. ISO said the surplus was being driven by increased sugar production in India, Thailand and Pakistan. ISO is projecting global sugar production to grow by +3.2% to 181.8 million metric tons in 2025-26. Meanwhile, sugar trader Czarnikov on November 5 raised his global 2025/26 sugar surplus estimate to 8.7 MMT, up +1.2 MMT from September’s estimate of 7.5 MMT.
The outlook for higher sugar production in Thailand is bearish for prices. Thai Sugar Millers Corp on October 1 forecast Thailand’s 2025/26 sugar crop to rise +5% y/y to 10.5 MMT. Thailand is the world’s third largest sugar producer and second largest exporter.
In its bi-annual report released on December 16, the USDA projected that global 2025/26 sugar production would increase +4.6% y/y to a record 189.318 MMT and global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT. USDA also forecasts 2025/26 global sugar ending stocks to fall -2.9% y/y to 41.188 MMT. USDA’s Foreign Agricultural Service (FAS) predicts Brazil’s 2025/26 sugar production will increase 2.3% to a record 44.7 MMT. FAS also predicts India’s 2025/26 sugar production to grow 25% year-on-year to 35.25 MMT, driven by favorable monsoon rains and increase in sugar acreage. Furthermore, FAS predicts Thailand’s 2025/26 sugar production will increase by +2% year-on-year to 10.25 MMT.
On the date of publication, Rich Asplund did not have (directly or indirectly) any positions in any securities mentioned in this article. All information and data in this article is for informational purposes only. Please see the Barchart Disclosure Policy here for more information.
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