Sugar prices continued their downward trend, with NY sugar reaching a 3-week low and London sugar a 4.25-year nearest-futures low, primarily due to expectations of abundant global supplies. This bearish sentiment is fueled by significant output increases from Brazil, projected bumper crops in India driven by strong monsoon rains and anticipated higher exports, and rising production in Thailand. Multiple analysts, including BMI Group and Covrig Analytics, forecast substantial global sugar surpluses for 2025/26, a view largely supported by USDA projections of record production and increased ending stocks, which collectively outweigh a minor deficit forecast from the International Sugar Organization.
Sugar prices are experiencing a significant downturn, with NY sugar hitting a 3-week low and London sugar a 4.25-year nearest-futures low, reflecting a strongly negative market sentiment. This slump is primarily driven by expectations of robust global supplies, particularly from key producing regions like Brazil, India, and Thailand. Brazil's Center-South sugar output in early September rose by 15.7% year-over-year, with a higher percentage of sugarcane crushed for sugar. Multiple analytical bodies project substantial global sugar surpluses for the 2025/26 season. BMI Group forecasts a 10.5 MMT surplus, while Covrig Analytics anticipates a 4.1 MMT surplus. The USDA further supports this bearish outlook, projecting a record global production of 189.318 MMT and a 7.5% year-over-year increase in ending stocks for 2025/26. India, the world's second-largest producer, is expected to see a 19% year-over-year increase in 2025/26 sugar production to 34.9 MMT, driven by favorable monsoon rains (8% above normal) and increased planted acreage. Thailand, the third-largest producer, also projects a 5% year-over-year increase to 10.5 MMT for 2025/26. These significant production increases from major exporters are exacerbating supply pressure. While the International Sugar Organization (ISO) forecasts a minor global deficit of -231,000 MT for 2025/26, this is significantly smaller than previous deficits and is overshadowed by the larger surplus projections from other agencies. The potential diversion of 4 MMT of Indian sugar to ethanol production is insufficient to offset the country's projected surplus, potentially leading to higher exports. The overall market tone remains bearish due to overwhelming supply expectations.
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Overall Sentiment
strongly negative
Sentiment Score
-0.80
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