World Sugar #11 March New York (SBH26) is down -0.30 (-1.97%) today and ICE White Sugar March #5 London (SWH26) is down -11.30 (-2.59%).
Sugar prices are falling today due to increased sugar production in India, after the National Federation of Indian Sugar Cooperatives Ltd reported that India’s October-November sugar production jumped +50% year-on-year to 4.1 MMT. The Coop reported that 424 sugar mills in India were crushing cane as of November 30, up from 382 a year ago, with 46.8 MMT crushed, up from 33.4 MMT a year ago.
The outlook for record sugar production in Brazil is pessimistic for prices. Conab, Brazil’s crop forecasting agency, on November 4 raised its estimate for Brazil’s sugar production for 2025/26 to 45 MMT, up from a previous forecast of 44.5 MMT. Unica announced today that sugar production in South-Central Brazil during the first half of November increased by +8.7% year-on-year to reach 983 tonnes. Furthermore, cumulative South Central sugar production for 2025-26 up to mid-November increased by +2.1% YoY to 39,179 MMT.
Last Friday, sugar prices hit a 6-week high on concerns over tightening global supplies. Last Wednesday, StoneX lowered its Brazil South Central sugar production estimate for 2026/27 to 41.5 MMT from a September estimate of 42.1 MMT.
Recent reports that India’s food ministry is considering raising the price of ethanol used for gasoline blending are bullish for sugar, as they could encourage Indian sugar mills to divert more cane crushing to ethanol production rather than sugar, thereby reducing sugar supplies.
Sugar prices have been receiving support since November 14, when India’s food ministry announced it would allow mills to export 1.5 MMT of sugar in the 2025/26 season, below previous estimates of 2 MMT. India introduced a quota system for sugar exports in 2022/23 after late rains reduced production and limited domestic supplies.
On the bearish side for sugar, the International Sugar Organization (ISO) on November 17 forecast a sugar surplus of 1.625 million tonnes in 2025-2026, after a deficit of 2.916 million tonnes in 2024-25. The ISO said the surplus was due to increased sugar production in India, Thailand and Pakistan. In August, the ISO had forecast a deficit of 231,000 tonnes for the 2025-26 marketing year. The ISO forecasts a +3.2% year-on-year increase in global sugar production, reaching 181.8 million tonnes in 2025-26.
Prospects for a robust global sugar supply have driven sugar prices higher since early October. On November 13, London sugar posted a 4.75-year low (SWZ25), and on November 6, New York sugar prices fell to a 5-year low (SBH26), mainly due to increased sugar production in Brazil and rumors of a global sugar surplus. On November 5, sugar trader Czarnikow increased its estimate of the global sugar surplus for 2025/26 to 8.7 MMT, up +1.2 MMT from a September estimate of 7.5 MMT.
Signs of a larger sugar harvest in India, the world’s second-largest producer, are undercutting prices after the India Sugar Mill Association (ISMA) on November 11 raised its estimate for India’s sugar production for 2025/26 to 31 MMT from an earlier forecast of 30 MMT, up +18.8% year-on-year. ISMA also reduced its estimate of 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 heavy monsoon rains could produce a bumper sugar crop. On September 30, the Indian Meteorological Department reported that the cumulative monsoon rainfall on that date was 937.2 mm, 8% above normal, marking the heaviest monsoon in five years. On June 2, the National Federation of Cooperative Sugar Mills of India projected that India’s sugar production for 2025/26 would increase by +19% year-on-year to 34.9 MMT, citing greater area planted to sugarcane. This would follow a -17.5% year-on-year decline in India’s sugar production in 2024/25, to a 5-year low of 26.1 MMT, according to the Indian Sugar Mills Association (ISMA).
Prospects for increased sugar production in Thailand are pessimistic for prices. Thai Sugar Millers Corp forecast on October 1 that Thailand’s sugar harvest for 2025/26 would increase by +5% year-on-year to 10.5 MMT. On May 2, the Thai Cane and Sugar Bureau reported that Thai sugar production for 2024/25 increased by +14% year-on-year to 10.00 MMT. Thailand is the world’s third largest sugar producer and second largest exporter.
The USDA, in its semi-annual report released on May 22, forecast that global sugar production in 2025/26 would increase +4.7% YoY to a record 189.318 MMT and global human sugar consumption in 2025/26 would increase +1.4% YoY to a record 177.921 MMT. The USDA also forecast that global ending sugar stocks for 2025/26 would increase by +7.5% YoY to 41,188 MMT. 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 MMT. FAS also predicted that India’s sugar production in 2025/26 would increase by 25% year-on-year to 35.3 MMT, thanks to favorable monsoon rains and increase in sugar area. Furthermore, FAS predicts that Thailand’s sugar production in 2025/26 will increase by +2% year-on-year to 10.3 MMT.
As of the date of publication, Rich Asplund did not hold (either directly or indirectly) any positions 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 Barchart.com
