Sugar prices saw a modest recovery on Tuesday, driven by a weaker dollar and short covering, but the market faces significant downward pressure from robust global supply forecasts. Multiple organizations, including BMI Group and Covrig Analytics, project a substantial global sugar surplus for 2025/26. The USDA further reinforces this bearish outlook, forecasting record global production of 189.3 MMT and a 7.5% increase in ending stocks, primarily due to strong output from Brazil, anticipated bumper crops and higher exports from India, and rising production in Thailand, collectively indicating ample supply that continues to weigh on prices.
Sugar futures experienced a modest recovery on Tuesday, with NY sugar #11 up +1.73% and London ICE white sugar #5 up +1.53%, primarily driven by a weaker dollar and short covering after both contracts hit multi-year lows. This rebound occurred despite persistent bearish sentiment stemming from robust global supply forecasts. Multiple analyst groups project significant global sugar surpluses for 2025/26, with BMI Group forecasting 10.5 MMT and Covrig Analytics estimating 4.1 MMT. The USDA reinforces this outlook, projecting record global production of 189.318 MMT (+4.7% y/y) and a 7.5% increase in ending stocks to 41.188 MMT. This is largely attributed to anticipated strong output from Brazil (+2.3% y/y to 44.7 MMT), India (+25% y/y to 35.3 MMT), and Thailand (+2% y/y to 10.3 MMT). While the International Sugar Organization (ISO) forecasts a global deficit of -231,000 MT for 2025/26, this is significantly smaller than previous deficits and contrasts sharply with other surplus projections. Favorable monsoon rains in India (8% above normal) and increased cane acreage are expected to boost Indian production and exports, potentially up to 4 MMT, further contributing to the global supply glut.
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Overall Sentiment
strongly negative
Sentiment Score
-0.70
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