On Wednesday, March NY world sugar #11 (SBH26) closed lower at -0.34 (-2.04%), while December London ICE white sugar #5 (SWZ25) also fell, closing down -7.30 (-1.59%).
For the second consecutive day, sugar prices experienced a significant decline, with London sugar hitting a two-week low. This dip in prices is attributed to a negative sentiment from the previous day, as Covrig Analytics forecasted a global sugar surplus of +4.1 MMT for the 2025/26 season.
Earlier this week, NY sugar initially surged to a 1.75-month high due to indications of a decrease in sugar content from Brazil’s sugarcane harvest. According to Unica, the average sugar content from Brazil’s Center-South sugarcane crushed in the first half of September fell to 154.58 kg/ton, down from 160.07 kg/ton the same timeframe last year.
An increase in sugar production in Brazil is bearish for market prices. Unica reported a 15.7% year-on-year rise to 3.622 MT in Brazil’s Center-South sugar production during the first half of September. Additionally, the proportion of sugarcane crushed for sugar saw an increase to 53.49% in the latter half of August, up from 47.74% the previous year. Nevertheless, the cumulative output for the 2025-26 season through mid-September is down by 0.1% year-on-year to 30.388 MMT.
Furthermore, the forecast of increased sugar exports from India poses a downside risk for sugar prices, as favorable monsoon rains could lead to a bumper harvest. The Indian Meteorological Department reported last Tuesday that cumulative monsoon rainfall in India as of September 30 reached 937.2 mm, which is 8% above normal and marks the strongest monsoon in five years. On June 2, India’s National Federation of Cooperative Sugar Factories predicted that India’s 2025/26 sugar production would grow by 19% year-on-year to 34.9 MMT, thanks to more acreage planted with cane. This follows a significant 17.5% year-on-year drop in sugar production to a five-year low of 26.2 MMT in 2024/25, as per the Indian Sugar Mills Association (ISMA).
Compounding the bearish outlook for sugar was the recent claim from sugar trader Sucden, which indicated that India may redirect 4 MMT of sugar for ethanol production in 2025/26. This diversion may not sufficiently mitigate the nation’s sugar surplus and could lead Indian sugar mills to export around 4 MMT, exceeding earlier projections of 2 MMT. India remains the world’s second-largest sugar producer.
