March NY world sugar #11 (SBH26) on Tuesday closed down -0.10 (-0.68%), and March London ICE white sugar #5 (SWH26) closed up +2.10 (+0.50%).

Sugar prices settled mixed on Tuesday.  Prices have a negative carryover from Monday when the International Sugar Organization (ISO) forecast a 1.625 million MT sugar surplus in 2025-26, following a 2.916 million MT deficit in 2024-25.  ISO said the surplus is being driven by increased sugar production in India, Thailand, and Pakistan.  In August, ISO had previously forecast a 231,000 MT deficit for the 2025-26 marketing year.  ISO is forecasting a +3.2% y/y rise in global sugar production to 181.8 million MT in 2025-26.

However, sugar prices recovered from their worst levels on Tuesday, with London sugar pushing into positive territory as short covering emerged after India's food ministry said it was considering boosting the price of ethanol used for gasoline blending, which could encourage India's sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus reducing sugar supplies.

Sugar prices rallied to 3-week highs last Friday amid tighter supplies from India.  India's food ministry said last Friday that it will allow mills to export 1.5 MMT of sugar in the 2025/26 season, less than earlier estimates of 2 MMT.  India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.

The outlook for robust global sugar supplies has hammered sugar prices over the past month.  Last Thursday, London sugar posted a new 4.75-year nearest-futures low, and on Nov 6, NY sugar prices slumped to a 5-year nearest-futures low, mainly due to higher sugar output in Brazil and talk of a global sugar surplus.  Sugar trader Czarnikow on Nov 5 boosted its global 2025/26 sugar surplus estimate to 8.7 MMT, up +1.2 MMT from a September estimate of 7.5 MMT.

The outlook for record sugar output in Brazil is bearish for prices.  Conab, Brazil's crop forecasting agency, on Nov 4 raised its Brazil 2025/26 sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT.  Unica recently reported that Brazil's Center-South sugar output in the second half of October rose by +16.4% y/y to 2.068 MT.  Also, the percentage of sugarcane crushed for sugar by Brazil's sugar mills in the second half of October increased to 46.02% from 45.91% the same time last year.  In addition, cumulative 2025-26 Center-South sugar output through October rose +1.6% y/y to 38.085 MMT.

Signs of a larger sugar crop in India, the world's second-largest producer, are undercutting prices after the India Sugar Mill Association (ISMA) last Tuesday raised its 2025/26 India sugar production estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% y/y.  The ISMA also cut its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, which may allow India to boost its sugar exports.

The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop.  On Sept 30, India's Meteorological Department reported that cumulative monsoon rainfall as of that date was 937.2 mm, 8% above normal, marking the strongest monsoon in five years.  On Jun 2, India's National Federation of Cooperative Sugar Factories projected that India's 2025/26 sugar production would climb +19% y/y to 34.9 MMT, citing larger planted cane acreage.  That would follow a -17.5% y/y 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).  

The outlook for higher sugar production in Thailand is bearish for prices.  The Thai Sugar Millers Corp on Oct 1 projected that Thailand's 2025/26 sugar crop will increase by +5% y/y to 10.5 MMT.  On May 2, Thailand's Office of the Cane and Sugar Board reported that Thailand's 2024/25 sugar production rose +14% y/y to 10.00 MMT.  Thailand is the world's third-largest sugar producer and the second-largest exporter.

The USDA, in its bi-annual report released May 22, projected that global 2025/26 sugar production would climb +4.7% y/y to a record 189.318 MMT and that global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT.  The USDA also forecast that 2025/26 global sugar ending stocks would climb by +7.5% y/y to 41.188 MMT.  The USDA's Foreign Agricultural Service (FAS) predicted that Brazil's 2025/26 sugar production would rise by 2.3% y/y to a record 44.7 MMT.  FAS also predicted that India's 2025/26 sugar production would increase by 25% y/y to 35.3 MMT, driven by favorable monsoon rains and increased sugar acreage.  In addition, FAS predicted that Thailand's 2025/26 sugar production will increase by +2% y/y to 10.3 MMT.