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Sugar Prices Slip on Higher Brazil Sugar Production

ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

May NY world sugar #11 (SBK26) today is down -0.10 (-0.63%), and May London ICE white sugar #5 (SWK26) is down -0.70 (-0.15%).

Sugar prices are under pressure today from higher production in Brazil as sugar mills divert more cane crushing toward sugar output rather than ethanol.  Unica reported today that cumulative 2025-26 Center-South sugar output (October through mid-March) is up +0.7% y/y to 40.25 MMT, with sugar mills boosting the amount of cane crushed for sugar to 50.61% from 48.08% last year.

 

On Thursday, NY sugar rallied to a 5.5-month high due to recent surge in crude oil prices (CLK26) to a 3.75-year high.  The strength in crude prices boosts ethanol prices and may encourage the world's sugar mills to increase ethanol production and curb sugar output.  

Sugar prices also have some support amid supply disruptions from the closure of the Strait of Hormuz.  According to Covrig Analytics, the closure of the strait has curbed approximately 6% of the world's sugar trade, constraining refined sugar output.

Earlier this month, sugar prices plunged to 5.5-year nearest-futures lows on concern that a global sugar surplus will persist.  On February 11, analysts from sugar trader Czarnikow said they expect a global sugar surplus of 3.4 MMT in the 2026/27 crop year, following an 8.3 MMT surplus in 2025/26.   Also, Green Pool Commodity Specialists said on January 29 that they expect a 2.74 MMT global sugar surplus for 2025/26 and a 156,000 MT surplus for 2026/27.  Meanwhile, StoneX said February 13 that it expects a global sugar surplus of 2.9 MMT in 2025/26.

The International Sugar Organization (ISO) on February 27 forecasted a +1.22 MMT (million metric ton) sugar surplus in 2025-26, following a -3.46 MMT deficit in 2024-25.  ISO said the surplus is being driven by increased sugar production in India, Thailand, and Pakistan.  ISO is forecasting a +3.0% y/y rise in global sugar production to 181.3 million MMT in 2025-26.  

The Indian Sugar and Bio-energy Manufacturers Association (ISMA) reported last Tuesday that India's 2025-26 sugar output from Oct 1-Mar 15 was up +10.5% y/y to 26.2 MMT.  On March 11, the ISMA projected India's 2025/26 sugar production at 29.3 MMT, up 12% y/y, below an earlier projection of 30.95 MMT.  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.  India is the world's second-largest sugar producer.  

Sugar prices are being undercut amid prospects of higher Indian sugar exports.  On February 13, India's government approved an additional 500,000 MT of sugar for export for the 2025/26 season, on top of the 1.5 MMT approved in November.  India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.

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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