Sugar Prices Settle Mixed on Higher Indian Sugar Production

Sugar prices settled mixed as a wave of bullish and bearish supply signals collided: Indian production is surging (ISMA: Oct–Nov +43% y/y to 4.11 MMT; ISMA raised its 2025/26 India estimate to 31 MMT and cut ethanol diversion to 3.4 MMT) and Brazil’s output was revised higher (Conab 2025/26 to 45 MMT; Center‑South cumulative through mid‑Nov 39.179 MMT), helping drive forecasts of abundant global supplies (USDA 2025/26 world production 189.318 MMT, ending stocks 41.188 MMT; ISO and Czarnikow project a swing to surplus), which has pushed London and NY futures to multi‑year lows since October; offsetting factors that could support prices are India’s decision to cap 2025/26 exports at 1.5 MMT and consideration of higher ethanol prices that might divert cane away from sugar, but on balance the outlook is bearish given the scale of expected additional output and exports.

Analysis

March NY world sugar (SBH26) closed up +0.02 (+0.14%) while March London ICE white sugar (SWH26) closed down -3.00 (-0.70%), and the market was described as settling mixed as bullish and bearish supply signals collided. London nearest-futures posted a 4.75-year low on Nov. 13 and New York nearest-futures hit a 5-year low on Nov. 6, underscoring the recent downside momentum driven by supply data.

Supply-side revisions are the dominant theme: ISMA reported India Oct–Nov production jumped +43% y/y to 4.11 MMT and raised its 2025/26 India estimate to 31 MMT (from 30 MMT) while cutting projected ethanol diversion to 3.4 MMT (from 5 MMT). Brazil output forecasts were lifted (Conab to 45 MMT from 44.5 MMT; Center‑South through mid‑Nov at 39.179 MMT) and forecasters including USDA (global production 189.318 MMT; ending stocks 41.188 MMT), ISO and Czarnikow now project a swing toward a multi‑MMT surplus.

Near‑term support factors include India’s announced 2025/26 export quota of 1.5 MMT (below prior 2 MMT expectations) and consideration of higher ethanol prices that could divert cane into fuel, but the scale of Brazilian, Indian and Thai production upgrades and rising global ending stocks leave the market structurally bearish for now.

Key Decisions for Investors

• Reduce directional long exposure to sugar futures or use put protection given rising global production and multi‑year lows, Monitor India policy moves closely—specifically final ethanol pricing and any change to the 1.5 MMT export quota—as these are the primary near‑term upside catalysts, Consider tactical short or spread trades (e.g., long ethanol/short sugar) if ethanol price support becomes credible, Maintain tight stop losses and size positions conservatively because weather or policy shifts (monsoon variability or export restrictions) can quickly invert the supply narrative