March NY world sugar #11 (SBH26) on Wednesday closed up +0.17 (+1.15%). March London ICE white sugar #5 (SWH26) closed up +1.50 (+0.35%).
Sugar prices recovered from 1-week lows on Wednesday and settled higher on some year-end fund short covering. Sugar prices initially fell on Wednesday after the dollar index (DXY00) rose to a 1-week high, weighing on most commodity prices, including sugar.
On Monday, NY sugar matched last Wednesday's 2.25-month high on expectations of smaller future sugar supplies from Brazil. Last Tuesday, consulting firm Safras & Mercado said that Brazil's sugar production in 2026/27 will fall by -3.91% to 41.8 MMT from 43.5 MMT expected in 2025/26. The firm expects Brazil's sugar exports in 2026/27 to fall -11% y/y to 30 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. Meanwhile, the India Sugar Mill Association (ISMA) reported Wednesday that Indian sugar production for 2025-26, from October 1 to December 31, jumped 24% y/y to 11.83 MMT.
Sugar prices were under pressure earlier this month amid prospects of higher sugar exports from India, after India's food secretary said the government may permit additional sugar exports to reduce a domestic supply glut. Last month, 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 rain reduced production and limited domestic supplies.
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. Unica reported on December 16 that Brazil's cumulative 2025-26 Center-South sugar output through November rose by +1.1% y/y to 39.904 MMT. Also, the ratio of cane crushed for sugar rose to 51.12% in 2025/36 from 48.34% in 2024/25.
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. ISO is forecasting a +3.2% y/y rise in global sugar production to 181.8 million MT in 2025-26. Meanwhile, 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.
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. Thailand is the world's third-largest sugar producer and the second-largest exporter.
The USDA, in its bi-annual report released on December 16, projected that global 2025/26 sugar production would climb +4.6% 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 fall by -2.9% 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 35.25 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 10.25 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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