New York March 11 World Sugar (SBH26) rose +0.04 (+0.27%) today. White sugar London ICE #5 (SWH26) for March is down -0.50 (-0.12%).
Sugar prices have recovered from early losses today and are trading mixed. Short covering emerged in sugar futures today after the Brazilian real (^USDBRL) rallied to a 1.5-month high against the dollar. The stronger real discourages export sales for Brazil’s sugar producers.
Sugar prices initially fell today due to increased sugar production in Brazil. Unica reported today that South Central Brazil’s 2025-26 cumulative sugar production through December rose +0.9% year-on-year to 40.222 MMT. Also, the crushed cane ratio for sugar increased to 50.82% in 2025/36 from 48.16% in 2024/25.
The prospect of a global sugar surplus is weighing on prices. Last Monday, Covrig Analytics raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT in October. However, Covrig expects the 2026/27 global sugar surplus to fall to 1.4 MMT as weak prices discourage production.
Signs of stronger sugar production in India are negative for prices. On Monday, the India Sugar Mill Association (ISMA) reported that India’s 2025-26 sugar production from October 1 to January 15 rose 22% year-on-year to 15.9 MMT. On November 11, ISMA raised its 2025/26 India sugar production estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% YoY. The ISMA also lowered its estimate of sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, which may allow India to increase its sugar exports. India is the world’s second largest producer of sugar.
Sugar prices have come under pressure amid prospects for increased Indian sugar exports, after India’s food secretary said the government may allow additional sugar exports to reduce excess domestic supply. In November, India’s food ministry said it would allow millers 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 supply.
Prospects for record sugar production in Brazil are low for prices. Conab, Brazil’s crop forecasting agency, on November 4 raised its 2025/26 Brazil sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT.
An excessively long position in London ICE white sugar futures could compound any price decline. Last Friday’s weekly Commitment of Traders (COT) report showed funds increased their net long white sugar positions by 4,544 to a record 48,203 (2011 data).
The outlook for smaller future sugar supplies from Brazil is a supportive factor for prices. Consultancy firm Safras & Mercado said on December 23 that Brazil’s sugar production in 2026/27 will fall -3.91% to 41.8 MMT, from 43.5 MMT forecast in 2025/26. The company expects Brazil’s sugar exports in 2026/27 to fall -11% y-o-y to 30 MMT.
On the sugar side, the International Sugar Organization (ISO) on November 17 forecast a sugar surplus of 1.625 million MT in 2025-26, after a deficit of 2.916 million MT in 2024-25. ISO said the surplus is being driven by increased sugar production in India, Thailand and Pakistan. ISO forecasts a +3.2% annual increase in global sugar production to 181.8 million MT in 2025-26. Meanwhile, sugar trader Czarnikow on November 5 raised its global 2025/26 sugar surplus estimate to 8.7 MMT, +1.2 MMT from September’s estimate of 7.5 MMT.
The outlook for higher sugar production in Thailand is low for prices. On October 1, Thai Sugar Millers Corp projected Thailand’s 2025/26 sugar crop to rise +5% YoY to 10.5 MMT. Thailand is the third largest producer of sugar in the world and the second largest exporter.
The USDA, in its bi-annual report released on December 16, projected that 2025/26 global sugar production would increase by +4.6% YoY to a record 189,318 MMT and that 2025/26 global human sugar consumption would increase by +1.4% YoY to a record 177,921 MMT. The USDA also forecast 2025/26 global ending sugar stocks to fall -2.9% year-on-year to 41,188 MMT. USDA’s Foreign Agricultural Service (FAS) forecast Brazil’s 2025/26 sugar production to rise 2.3% year-on-year to a record 44.7 MMT. FAS also predicted that India’s 2025/26 sugar production would increase by 25% y-o-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% annually to 10.25 MMT.
As of the date of publication, Rich Asplund had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
itstargetnews
