March NY world sugar #11 (SBH26) on Monday closed down -0.45 (-2.96%), and March London ICE white sugar #5 (SWH26) closed down -14.40 (-3.31%).
Sugar prices fell sharply to 1-week lows on Monday as India ramped up sugar production. The India National Federation of Cooperative Sugar Factories Ltd reported Monday that Indian sugar production from Oct-Nov jumped +50% y/y to 4.1 MMT. The India Coop also 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 output in Brazil is bearish for prices. Conab, Brazil's crop forecasting agency, on November 4 raised its Brazil 2025/26 sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT. On Monday, Unica reported that Brazil's Center-South sugar output in the first half of November rose by +8.7% y/y to 983 MT. Also, cumulative 2025-26 Center-South sugar output through mid-November rose by +2.1% y/y to 39.179 MMT.
Last Friday, sugar prices rallied to 6-week highs on concern about tighter global supplies. Last Wednesday, StoneX cut its Brazil 2026/27 Center-South sugar production estimate to 41.5 MMT from a September estimate of 42.1 MMT.
Recent news that India's food ministry is considering boosting the price of ethanol used for gasoline blending is bullish for sugar, as it could encourage India's sugar mills to divert more cane crushing toward ethanol production rather than sugar, thereby reducing sugar supplies.
Sugar prices have support from November 14, when India's food ministry said it would allow mills to export 1.5 MMT of sugar in the 2025/26 season, below 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.
On the bearish side for sugar, the International Sugar Organization (ISO) on November 17 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.
The outlook for robust global sugar supplies has hammered sugar prices since early October. On November 13, London sugar posted a 4.75-year nearest-futures low (SWZ25), and on November 6, NY sugar prices slumped to a 5-year nearest-futures low (SBH26), mainly due to higher sugar output in Brazil and talk of a global sugar surplus. Sugar trader Czarnikow on November 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.
Signs of a larger sugar crop in India, the world's second-largest producer, are undercutting prices after the India Sugar Mill Association (ISMA) on November 11 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 September 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 June 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 October 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.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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