March NY world sugar #11 (SBH26) on Wednesday closed down -0.11 (-0.77%), and December London ICE white sugar #5 (SWZ25) closed down -0.70 (-0.17%).
Sugar prices retreated on Wednesday, with NY sugar posting a 5-year nearest-futures low. 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 Tuesday 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.
Sugar prices were already under pressure from Tuesday when Conab, Brazil’s crop forecasting agency, raised its Brazil 2025/26 sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT.
This latest month-long selloff in sugar knocked NY sugar prices to a 5-year nearest-futures low on Wednesday and London sugar to a 4.75-year low last Thursday, mainly due to higher sugar output in Brazil and talk of a global sugar surplus. Datagro on October 21 projected that Brazil’s Center-South 2026/27 sugar production will climb +3.9% y/y to a record 44 MMT. In related news, BMI Group on October 13 projected a global 2025/26 sugar surplus of 10.5 MMT, and Covrig Analytics on October 7 projected a global 2025/26 sugar surplus of 4.1 MMT.
Higher sugar output in Brazil is undercutting prices after Unica reported last Thursday that Brazil’s Center-South sugar output in the first half of October rose by +1.3% y/y to 2.484 MT. Also, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the first half of October increased to 48.24% from 47.33% the same time last year. In addition, cumulative 2025-26 Center-South sugar output through mid-October rose +0.9% y/y to 36.016 MMT.
The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop. On September 30, India’s Meteorological Department reported that cumulative monsoon rainfall as of that date was 937.2 mm, 8% above normal, marking the strongest monsoon in five years. On June 2, 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).
Another bearish factor for sugar was the recent assertion from sugar trader Sucden that India may divert only 4 MMT of sugar to make ethanol in 2025/26, which is not enough to ease the country’s sugar surplus and may prompt India’s sugar mills to export as much as 4 MMT of sugar, above earlier expectations of 2 MMT.
