On Tuesday, March NY world sugar #11 (SBH26) settled up +0.27 (+1.73%), while December London ICE white sugar #5 (SWZ25) increased by +6.80 (+1.53%).
Sugar prices bounced back from early dips, driven higher by a weakening dollar which encouraged short covering in sugar futures. Initially, NY sugar fell to a three-week low, and London sugar hit a 4.25-year nearest-futures low. The market is being pressured by expectations of strong global sugar supplies. In forecasts released on Monday, BMI Group indicated a global sugar surplus of 10.5 MMT for 2025/26, and Covrig Analytics projected a surplus of 4.1 MMT for 2025/25 the week before.
-
Coffee Prices Rally on Dryness in Brazil and Tighter ICE Inventories
-
Cocoa Prices Pressured as Supply Fears Wane and Demand Remains Tepid
For the past seven months, sugar prices have faced pressure, with NY sugar reaching a 4.5-year nearest-futures low (SBV25) last month due to rising sugar production signals from Brazil. As reported on October 2, Unica noted that Brazil’s Center-South sugar output for the first half of September increased by +15.7% year-over-year to 3.622 MT. Furthermore, the proportion of sugarcane processed for sugar by Brazilian mills rose to 53.49% from 47.74% during the same period last year. However, cumulative sugar production in the Center-South for 2025-26 up to mid-September decreased by -0.1% year-over-year to 30.388 MMT.
The prospect of increased sugar exports from India adds to the downward pressure on prices, as favorable monsoon rains are likely to yield a substantial sugar harvest. India’s Meteorological Department indicated on September 30 that total monsoon rainfall was 937.2 mm, which is 8% above-average, marking the strongest monsoon in the past five years. The National Federation of Cooperative Sugar Factories projected on June 2 that India’s sugar production for 2025/26 would grow by +19% year-over-year to 34.9 MMT, following a projection of a -17.5% decline to a five-year low of 26.2 MMT in the 2024/25 season, as reported by the Indian Sugar Mills Association (ISMA).
Additionally, a potential bearish influence for sugar markets comes from claims by sugar trader Sucden that India might redirect 4 MMT of sugar production towards ethanol in 2025/26. This is insufficient to alleviate India’s sugar surplus and could lead to Indian sugar mills exporting up to 4 MMT, surpassing earlier estimates of 2 MMT. India stands as the second-largest sugar producer globally.
