Sugar prices exhibited mixed movements, gaining some short-term support from declining sugar content in Brazil's Center-South crush and robust demand, exemplified by Pakistan's recent orders. However, the market's underlying trend remains bearish, driven by multiple forecasts, including StoneX, Czarnikow, and the USDA, projecting a substantial global sugar surplus for the 2025/26 season. This anticipated oversupply stems from expected production increases in major regions like India, Brazil, and Thailand, fueled by favorable weather and expanded acreage, largely overshadowing a conflicting deficit forecast from the International Sugar Organization and recent Brazilian production cuts. The consensus for abundant supplies suggests continued downward pressure on prices, extending the recent multi-year lows.
March NY world sugar 11 (SBH26) on Friday closed up +0.07 (+0.431%), and December London ICE white sugar 5 (SWZ25) closed down -1.20 (-0.26%). Sugar prices settled mixed on Friday. Sugar has carryover support from Thursday, when Unica reported that the sugar content in Brazil's Center-South sugarcane crush declined, signaling lower sugar production. The sugar content in crushed cane in the first half of September in Brazil dropped to 154.58 kilogram per ton (kg/ton) versus 160.07 kg/ton a year earlier. On Tuesday, NY sugar rallied to a 1.5-month nearest-futures (V25) high, and London sugar climbed to a 2-week high on signs of stronger global demand as Pakistan has placed orders for a total of 320,000 MT of sugar for immediate delivery. Last Tuesday, NY sugar posted a 4.25-year nearest-futures low, and London sugar posted a 4-year low as they extended their 7-month downtrend due to prospects of abundant global sugar supplies. Last Tuesday, StoneX projected a global sugar surplus of +2.8 MMT for the upcoming 2025/26 season, switching from a deficit of -4.7 MMT in the 2024/25 season. Higher sugar output in Brazil is bearish for prices. Unica reported Thursday that Brazil's Center-South sugar output in the first half of September rose by +15.7% y/y to 3.622 MT. Also, the percentage of sugarcane crushed for sugar by Brazil's sugar mills in the second half of August increased to 53.49% from 47.74% the same time last year. However, cumulative 2025-26 Center-South sugar output through mid-September fell -0.1% y/y to 30.388 MMT. The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop. India's Meteorological Department reported Tuesday that the cumulative monsoon rain in India as of September 30 was 937.2 mm, 8% above normal and the strongest monsoon in 5 years. The outlook for higher sugar production in India is bearish for prices. 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 26.2 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 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. India is the world's second-largest sugar producer. The outlook for higher sugar production in Thailand is bearish for prices after the Thai Sugar Miller Corp on Wednesday projected that Thailand's 2025/26 sugar crop will increase by +5% y/y to 10.5 MMT. On May 2, Thailand's Office of the Cane and Sugar Board reported that Thailand's 2024/25 sugar production rose +14% y/y to 10.00 MMT. Thailand is the world's third-largest sugar producer and the second-largest exporter of sugar. On August 29, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficits. The ISO projects a global 2025/26 sugar deficit of -231,000 MT, improving from a -4.88 MMT shortfall in 2024/25. The ISO also projects 2025/26 global sugar production will rise by +3.3% y/y to 180.6 MMT, and 2025/26 global sugar consumption will increase +0.3% y/y to 180.8 MMT. Expectations for abundant sugar supplies are bearish for prices. On June 30, commodities trader Czarnikow projected a 7.5 MMT global sugar surplus for the 2025/26 season, the largest surplus in 8 years. On May 22, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% y/y to a record 189.318 MMT, with global sugar ending stocks at 41.188 MMT, up 7.5% y/y. On August 19, Conab, Brazil's government crop forecasting agency, cut its Brazil 2025/26 production estimate by 3.1% to 44.5 MMT from a previous estimate of 45.9 MMT. In July, Conab reported that 2024/25 Brazil sugar production fell by -3.4% y/y to 44.118 MMT, citing lower sugarcane yields due to drought and excessive heat. The USDA, in its bi-annual report released May 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 forecasted that 2025/26 global sugar ending stocks would climb +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 +2.3% y/y to a record 44.7 MMT FAS predicted that India's 2025/26 sugar production would rise +25% y/y to 35.3 MMT due to favorable monsoon rains and increased sugar acreage. FAS predicted that Thailand's 2025/26 sugar production will climb +2% y/y to 10.3 MMT. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The sugar market is presenting a complex but predominantly bearish outlook, with short-term bullish signals being overshadowed by strong forecasts for a significant global supply glut in the 2025/26 season. While NY sugar futures saw a minor gain (+0.43%) supported by a reported decline in the sugar content of Brazil's cane crush (to 154.58 kg/ton vs. 160.07 kg/ton YoY) and strong spot demand from Pakistan (320,000 MT), the broader fundamental picture remains negative. Multiple influential forecasts, including a +2.8 MMT surplus from StoneX and a substantial +7.5 MMT surplus from Czarnikow, point towards oversupply, a sentiment echoed by the USDA's projection of record global production at 189.318 MMT. This is driven by anticipated bumper crops in key producing nations. India, benefiting from its strongest monsoon in five years, is projected to increase production by +19% to 34.9 MMT, potentially doubling its exports to 4 MMT. Similarly, Thailand's output is expected to rise +5% to 10.5 MMT. While Brazilian data shows some near-term contradictions, such as a cumulative output dip of -0.1% YoY, the more significant indicators like a +15.7% YoY increase in H1 September output and a higher crush-for-sugar ratio (53.49%) support the surplus narrative. The contrarian forecast of a small deficit from the International Sugar Organization (-231,000 MT) appears to be an outlier and has not been sufficient to reverse the 7-month downtrend that recently pushed futures to multi-year lows.
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