Sugar prices continue to be subdued due to plentiful global inventories

Sugar Market Update: Price Movements and Global Trends

March contracts for New York world sugar #11 (SBH26) have risen by +0.07 (+0.48%) today, while March London ICE white sugar #5 (SWH26) has declined by -4.00 (-0.95%).

New York sugar prices are seeing gains, supported by a weaker U.S. dollar, whereas London sugar futures are experiencing losses.

Latest Insights from Barchart

Global Sugar Production and Its Impact on Prices

Rising worldwide sugar output continues to exert downward pressure on prices. According to Unica, Brazil's Center-South region produced 40.222 million metric tons (MMT) of sugar from the start of the 2025-26 season through December, a 0.9% increase compared to the previous year. Additionally, the proportion of sugarcane processed for sugar climbed to 50.82% in 2025/26, up from 48.16% in 2024/25.

The India Sugar Mill Association (ISMA) reported that India's sugar production from October 1 to January 15 for the 2025-26 season reached 15.9 MMT, marking a 22% year-over-year increase. On November 11, ISMA revised its forecast for India's 2025/26 sugar output to 31 MMT, up from the earlier estimate of 30 MMT and representing an 18.8% annual rise. ISMA also reduced its projection for sugar allocated to ethanol production to 3.4 MMT, down from a July estimate of 5 MMT, potentially enabling higher sugar exports. India remains the world's second-largest sugar producer.

Expectations of increased sugar exports from India have contributed to price weakness. The country's food secretary indicated that the government may authorize additional sugar exports to address domestic oversupply. In November, the food ministry announced that mills would be permitted to export 1.5 MMT of sugar during the 2025/26 season. India implemented an export quota system in 2022/23 after late-season rainfall curtailed output and tightened domestic availability.

Forecasts for a global sugar surplus are also weighing on the market. Covrig Analytics raised its estimate for the 2025/26 global sugar surplus to 4.7 MMT in December, up from 4.1 MMT in October. However, the firm anticipates the surplus will shrink to 1.4 MMT in 2026/27 as lower prices discourage production.

Expectations for record sugar production in Brazil are also bearish for prices. On November 4, Brazil's crop agency Conab increased its 2025/26 sugar output forecast to 45 MMT, up from a previous estimate of 44.5 MMT.

Conversely, projections for reduced Brazilian sugar supplies in the future could support prices. Safras & Mercado, a consulting firm, stated on December 23 that Brazil's sugar production is expected to decrease by 3.91% to 41.8 MMT in 2026/27, compared to 43.5 MMT forecast for 2025/26. The firm also predicts that Brazil's sugar exports will drop by 11% year-over-year to 30 MMT in 2026/27.

Bearish Factors and Global Production Outlook

The International Sugar Organization (ISO) projected on November 17 that the global sugar market will see a surplus of 1.625 million MT in 2025-26, following a deficit of 2.916 million MT in 2024-25. This surplus is attributed to increased production in India, Thailand, and Pakistan. ISO expects global sugar output to rise by 3.2% year-over-year to 181.8 million MT in 2025-26. Meanwhile, sugar trader Czarnikow raised its estimate for the 2025/26 global sugar surplus to 8.7 MMT in November, up by 1.2 MMT from its September projection.

Higher anticipated sugar production in Thailand is another bearish signal for prices. The Thai Sugar Millers Corp forecasted on October 1 that Thailand's 2025/26 sugar crop will grow by 5% year-over-year to 10.5 MMT. Thailand is the world's third-largest sugar producer and the second-largest exporter.

According to the USDA's bi-annual report released on December 16, global sugar production for 2025/26 is expected to reach a record 189.318 MMT, a 4.6% increase from the previous year. Global human consumption of sugar is also projected to hit a new high of 177.921 MMT, up 1.4% year-over-year. The USDA anticipates that global sugar ending stocks will decline by 2.9% to 41.188 MMT. The USDA's Foreign Agricultural Service (FAS) forecasts Brazil's 2025/26 sugar output to rise by 2.3% to a record 44.7 MMT, while India's production is expected to jump by 25% to 35.25 MMT, supported by favorable monsoon conditions and expanded sugarcane acreage. FAS also predicts Thailand's sugar output will increase by 2% to 10.25 MMT in 2025/26.