World Sugar #11 March New York (SBH26) is up +0.30 (+2.11%) today and ICE White Sugar London #5 December (SWZ25) is up +9.70 (+2.38%).
Sugar prices are rising sharply today, with New York sugar posting a one-week high. Short positions appeared in sugar futures today following signs that India may export less sugar than initially expected, as Bloomberg reported that India’s food ministry is considering a proposal to allow sugar mills to export 1.5 MMT 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.
Prospects for a robust global sugar supply have driven sugar prices higher over the past month. On Monday, London sugar posted a new 4.75-year low, and last Thursday, New York sugar prices fell to a 5-year low, mainly due to increased sugar production in Brazil and rumors of a global sugar surplus. Last Wednesday, sugar trader Czarnikow raised 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.
The outlook for record sugar production in Brazil is pessimistic for prices. Last Tuesday, Conab, Brazil’s crop forecasting agency, raised its estimate for Brazil’s sugar production for 2025/26 to 45 MMT, up from a previous forecast of 44.5 MMT. Last Thursday, Unica announced that sugar production in South-Central Brazil during the first half of October increased by +1.3% year-on-year to reach 2,484 tonnes. In addition, the percentage of sugarcane crushed for sugar by Brazilian sugar mills in the first half of October increased to 48.24%, compared to 47.33% in the same period last year. Furthermore, cumulative South Central sugar production for 2025-26 up to mid-October increased by +0.9% YoY to 36.016 MMT. Along the same lines, Datagro forecast on October 21 that South-Central Brazil sugar production for 2026/27 would increase by +3.9% year-on-year to reach a record 44 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 Tuesday 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 International Sugar Organization (ISO) on August 29 forecast a global sugar deficit for the 2025/26 season, marking the sixth consecutive year of deficits. The ISO projects a global sugar deficit of -231,000 tonnes for 2025/26, down from the deficit of -4.88 MMT for 2024/25. The ISO also forecasts that global sugar production in 2025/26 will increase by +3.3% y-o-y to 180.6 MMT, and global sugar consumption in 2025/26 will increase by +0.3% y-o-y to 180.8 MMT.
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
