Sugar Prices Sink on the Outlook for a Global Sugar Glut to Continue

March NY world sugar #11 (SBH26) on Friday closed down -0.16 (-1.12%), and March London ICE white sugar #5 (SWH26) closed down -3.50 (-0.86%).

Sugar costs retreated on Friday, with NY sugar falling to a 3-month low.  Sugar costs have been in a gradual decline over the previous three months, with London sugar slumping to a 5-year nearest-futures low on Monday because the outlook for world sugar surpluses continues.  On Friday, Unica reported that Brazil’s cumulative 2025-26 Heart-South sugar output by mid-January rose by +0.9% y/y to 40.236 MMT.  Additionally, the ratio of cane crushed for sugar rose to 50.78% in 2025/36 from 48.15% in 2024/25.

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The outlook for persistent world sugar surpluses is weighing on costs.  On Wednesday, analysts from sugar dealer Czarnikow stated they anticipate a worldwide sugar surplus of three.4 MMT within the 2026/27 crop 12 months, following an 8.3 MMT surplus in 2025/26.  

Final Thursday, Inexperienced Pool Commodity Specialists stated that they anticipate a 2.74 MMT world sugar surplus for 2025/26 and a 156,000 MT surplus for 2026/27.  Additionally, StoneX stated final Friday it expects a worldwide sugar surplus of two.9 MMT in 2025/26.

The India Sugar Mill Affiliation (ISMA) reported January 19 that India’s 2025-26 sugar output from Oct 1-Jan 15 is up +22% y/y to fifteen.9 MMT.  The ISMA on November 11 raised its 2025/26 India sugar manufacturing estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% y/y.  The ISMA additionally minimize its estimate for sugar used for ethanol manufacturing in India to three.4 MMT from a July forecast of 5 MMT, which can enable India to spice up its sugar exports.  India is the world’s second-largest sugar producer.

Sugar costs have been weighed down amid prospects of upper sugar exports from India, after India’s meals secretary stated the federal government might allow extra sugar exports to cut back a home provide glut.  In November, India’s meals ministry stated it will enable mills to export 1.5 MMT of sugar within the 2025/26 season.  India launched a quota system for sugar exports in 2022/23 after late rain lowered manufacturing and restricted home provides.

The outlook for persistent world sugar surpluses is bearish for costs.  Covrig Analytics on December 12 raised its 2025/26 world sugar surplus estimate to 4.7 MMT from 4.1 MMT in October.  Nonetheless, Covrig tasks that the 2026/27 world sugar surplus will fall to 1.4 MMT, as weak costs discourage manufacturing.

The outlook for report sugar output in Brazil is bearish for costs.  Conab, Brazil’s crop forecasting company, on November 4 raised its Brazil 2025/26 sugar manufacturing estimate to 45 MMT from a earlier forecast of 44.5 MMT.  

The outlook for smaller future sugar provides from Brazil is a supportive issue for costs.  Consulting agency Safras & Mercado stated on December 23 that Brazil’s sugar manufacturing in 2026/27 will fall by -3.91% to 41.8 MMT from 43.5 MMT anticipated in 2025/26.  The agency expects Brazil’s sugar exports in 2026/27 to fall by -11% y/y to 30 MMT.

On the bearish aspect for sugar, the Worldwide Sugar Group (ISO) on November 17 forecast a 1.625 million MT sugar surplus in 2025-26, following a 2.916 million MT deficit in 2024-25.  ISO stated the excess is being pushed by elevated sugar manufacturing in India, Thailand, and Pakistan.  ISO is forecasting a +3.2% y/y rise in world sugar manufacturing to 181.8 million MT in 2025-26.  In the meantime, sugar dealer Czarnikow on November 5 boosted its world 2025/26 sugar surplus estimate to eight.7 MMT, up +1.2 MMT from a September estimate of seven.5 MMT.

The outlook for greater sugar manufacturing in Thailand is bearish for costs.  The Thai Sugar Millers Corp on October 1 projected that Thailand’s 2025/26 sugar crop will improve by +5% y/y to 10.5 MMT.  Thailand is the world’s third-largest sugar producer and the second-largest exporter.

The USDA, in its bi-annual report launched on December 16, projected that world 2025/26 sugar manufacturing would climb +4.6% y/y to a report 189.318 MMT and that world 2025/26 human sugar consumption would improve +1.4% y/y to a report 177.921 MMT.  The USDA additionally forecast that 2025/26 world sugar ending shares would fall by -2.9% y/y to 41.188 MMT.  The USDA’s International Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise by 2.3% y/y to a report 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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