Sugar prices continued to decline today, adding to the ongoing selloff in the market. The October NY world sugar #11 (SBV25) dropped by -1.27%, while August London ICE white sugar #5 (SWQ25) fell by -0.71%. This downward trend is a result of signs of robust sugar supplies coupled with weak demand, putting pressure on prices.
ICE Futures US reported that only 45,112 MT of NY sugar was delivered to settle the July sugar contract, the smallest amount in 11 years. This indicates a lack of demand in the market, further contributing to the bearish sentiment. Additionally, commodities trader Czarnikow projected a global sugar surplus of 7.5 MMT for the 2025/26 season, the largest surplus in 8 years. These expectations of increased supply are limiting any upside potential for sugar prices.
The decline in sugar prices over the past few months is primarily driven by expectations of a global sugar surplus. The USDA’s biannual report projected a record sugar production of 189.318 MMT for the 2025/26 season, with ending stocks at 41.188 MMT, up 7.5% year-over-year. The outlook for higher sugar production in India, the second-largest producer, is also bearish for prices. India’s National Federation of Cooperative Sugar Factories predicts a 19% increase in sugar production for the upcoming season, fueled by favorable monsoon conditions.
Furthermore, Brazil is expected to see a 2.3% rise in sugar production to a record 44.7 MMT for the 2025/26 season. Thailand and India are also projected to increase their sugar output, adding to the global surplus. On the other hand, reduced sugar production in Brazil and a global sugar deficit forecast by the International Sugar Organization offer some support to sugar prices.
In conclusion, the sugar market is currently facing downward pressure due to ample supplies and weak demand. Expectations of a global sugar surplus and increased production in key producing countries are keeping prices in check. While there are some factors supporting prices, the overall outlook remains bearish for the sugar market in the near term.
