New York March 11 World Sugar (SBH26) closed down -0.15 (-0.99%) on Monday and London March 5 White Sugar ICE (SWH26) closed -3.00 (-0.70%).
Sugar prices fell on Monday due to higher Indian sugar production and lower crude oil prices. The India Sugar Mill Association (ISMA) on Monday reported that Indian sugar production from October 1 to December 15 rose 28% year-on-year to 7.8 MMT.
Weakness in crude oil (CLF26) is weighing on ethanol prices and may prompt the world’s sugar mills to divert more cane crushing to sugar production instead of ethanol, boosting sugar supplies, after crude fell to a 1.75-month low on Monday.
The outlook for record sugar production in Brazil is also 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. Last Monday, Unica reported that sugar production from south-central Brazil during the first half of November increased by +8.7% year-on-year to 983 MT. Also, cumulative 2025-26 South Central sugar production through mid-November rose +2.1% y-o-y to 39,179 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. In August, ISO had previously forecast a shortfall of 231,000 MT for the 2025-26 trading year. 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.
Signs of a bigger sugar harvest in India, the world’s second largest producer, are weighing on prices after the Indian Sugar Mill Association (ISMA) on November 11 raised its 2025/26 Indian sugar production estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% y-o-y. 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.
The outlook for increased Indian sugar exports is negative for sugar prices as heavy monsoon rains may produce a bumper sugar crop. On 30 September, the India Meteorological Department reported that the cumulative monsoon rainfall since that date was 937.2 mm, 8% above normal, marking the heaviest monsoon in five years. On June 2, the National Federation of Cooperative Sugar Mills of India projected India’s 2025/26 sugar production to rise 19% y-o-y to 34.9 MMT, citing higher cane area. This would follow a -17.5% year-on-year decline in India’s sugar output in 2024/25 to a 5-year low of 26.1 MMT, according to the Indian Sugar Mills Association (ISMA).
Sugar prices have been supported since November 14, when India’s food ministry said it would allow millers to export 1.5 MMT of sugar in the 2025/26 season, down from earlier estimates of 2 MMT. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supply.
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. On May 2, the Office of the Cane and Sugar Board of Thailand reported that Thailand’s 2024/25 sugar production rose 14% year-on-year to 10,00 MMT. Thailand is the third largest producer of sugar in the world and the second largest exporter.
The USDA, in its biannual report released on May 22, projected that 2025/26 world sugar production would increase by +4.7% y/y to a record 189,318 MMT and that 2025/26 global human sugar consumption would increase by +1.4% y/y to a record 177,921 MMT. The USDA also forecast 2025/26 global ending sugar stocks to rise +7.5% 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 35.3 MMT, boosted by favorable monsoon rains and increased sugar acreage. In addition, FAS predicted that Thailand’s 2025/26 sugar production will increase by +2% YoY to 10.3 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
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