Sugar Prices Slip on Higher Brazil Sugar Production

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

Sugar costs are underneath strain right now from increased manufacturing in Brazil as sugar mills divert extra cane crushing towards sugar output moderately than ethanol.  Unica reported right now that cumulative 2025-26 Heart-South sugar output (October by way of mid-March) is up +0.7% y/y to 40.25 MMT, with sugar mills boosting the quantity of cane crushed for sugar to 50.61% from 48.08% final 12 months.

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On Thursday, NY sugar rallied to a 5.5-month excessive resulting from current surge in crude oil costs (CLK26) to a 3.75-year excessive.  The energy in crude costs boosts ethanol costs and will encourage the world’s sugar mills to extend ethanol manufacturing and curb sugar output.  

Sugar costs even have some help amid provide disruptions from the closure of the Strait of Hormuz.  In response to Covrig Analytics, the closure of the strait has curbed roughly 6% of the world’s sugar commerce, constraining refined sugar output.

Earlier this month, sugar costs plunged to five.5-year nearest-futures lows on concern {that a} international sugar surplus will persist.  On February 11, analysts from sugar dealer Czarnikow mentioned they count on a world sugar surplus of three.4 MMT within the 2026/27 crop 12 months, following an 8.3 MMT surplus in 2025/26.   Additionally, Inexperienced Pool Commodity Specialists mentioned on January 29 that they count on a 2.74 MMT international sugar surplus for 2025/26 and a 156,000 MT surplus for 2026/27.  In the meantime, StoneX mentioned February 13 that it expects a world sugar surplus of two.9 MMT in 2025/26.

The Worldwide Sugar Group (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 mentioned the excess is being pushed by elevated sugar manufacturing in India, Thailand, and Pakistan.  ISO is forecasting a +3.0% y/y rise in international sugar manufacturing to 181.3 million MMT in 2025-26.  

The Indian Sugar and Bio-energy Producers Affiliation (ISMA) reported final 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 manufacturing at 29.3 MMT, up 12% y/y, beneath an earlier projection of 30.95 MMT.  The ISMA additionally reduce its estimate for sugar used for ethanol manufacturing in India to three.4 MMT from a July forecast of 5 MMT, which can permit India to spice up its sugar exports.  India is the world’s second-largest sugar producer.  

Sugar costs are being undercut amid prospects of upper Indian sugar exports.  On February 13, India’s authorities accredited an extra 500,000 MT of sugar for export for the 2025/26 season, on prime of the 1.5 MMT accredited in November.  India launched a quota system for sugar exports in 2022/23 after late rain diminished manufacturing and restricted home provides.

The USDA, in its bi-annual report launched on December 16, projected that international 2025/26 sugar manufacturing would climb +4.6% y/y to a file 189.318 MMT and that international 2025/26 human sugar consumption would improve +1.4% y/y to a file 177.921 MMT.  The USDA additionally forecast that 2025/26 international sugar ending shares would fall by -2.9% y/y to 41.188 MMT.  The USDA’s Overseas Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise by 2.3% y/y to a file 44.7 MMT.  FAS additionally predicted that India’s 2025/26 sugar manufacturing would improve by 25% y/y to 35.25 MMT, pushed by favorable monsoon rains and elevated sugar acreage.  As well as, FAS predicted that Thailand’s 2025/26 sugar manufacturing will improve by +2% y/y to 10.25 MMT. 

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