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March NY world sugar #11 (SBH26) on Tuesday closed down -0.13 (-0.87%), and March London ICE white sugar #5 (SWH26) closed down -3.40 (-0.80%).
Sugar prices retreated on Tuesday due to a slump in crude oil prices. WTI crude (CLF26) sank to a 4.75-year low on Tuesday, which undercuts ethanol prices and may prompt the world’s sugar mills to divert more cane crushing toward sugar production rather than ethanol, thus boosting sugar supplies.
Sugar prices were already on the defensive from Monday when the India Sugar Mill Association (ISMA) reported that Indian sugar production from October 1 to December 15 jumped +28% y/y to 7.8 MMT.
The outlook for record sugar output in Brazil is also bearish for prices. Conab, Brazil’s crop forecasting agency, on Nov 4 raised its Brazil 2025/26 sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT. On Tuesday, Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through November rose by +1.1% y/y to 39.904 MMT. Also, the amount of cane crushed for sugar rose to 51.12% in 2025/36 from 48.34% in 2024/25.
On the bearish side for sugar, the International Sugar Organization (ISO) on Nov 17 forecast a 1.625 million MT sugar surplus in 2025-26, following a 2.916 million MT deficit 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 231,000 MT deficit for the 2025-26 marketing year. ISO is forecasting a +3.2% y/y rise in global sugar production to 181.8 million MT in 2025-26. Meanwhile, sugar trader Czarnikow on Nov 5 boosted its global 2025/26 sugar surplus estimate to 8.7 MMT, up +1.2 MMT from a September estimate of 7.5 MMT.
Signs of a larger sugar crop in India, the world’s second-largest producer, are undercutting prices after the India Sugar Mill Association (ISMA) on Nov 11 raised its 2025/26 India sugar production estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% y/y. The ISMA also cut its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, which may allow India to boost its sugar exports.
The outlook for higher sugar exports from India is negative for sugar prices, as India’s National Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar production would climb +19% y/y to 34.9 MMT, citing larger planted cane acreage. That would follow a -17.5% y/y decline in India’s sugar production in 2024/25 to a 5-year low of 26.1 MMT, according to the Indian Sugar Mills Association (ISMA).
Sugar prices have support from Nov 14, when India’s food ministry said it would allow mills to export 1.5 MMT of sugar in the 2025/26 season, below earlier estimates of 2 MMT. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.
The outlook for higher sugar production in Thailand is bearish for prices. The Thai Sugar Millers Corp on Oct 1 projected that Thailand’s 2025/26 sugar crop will increase 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 releasedMay 22, projected that global 2025/26 sugar production would climb +4.7% y/y to a record 189.318 MMT and that global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT. The USDA also forecast that 2025/26 global sugar ending stocks would climb by +7.5% y/y to 41.188 MMT. The USDA’s Foreign Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar production would rise by 2.3% y/y to a record 44.7 MMT. FAS also predicted that India’s 2025/26 sugar production would increase by 25% y/y to 35.3 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% y/y to 10.3 MMT.
