Sugar prices continued to plummet on Thursday, with both New York and London sugar futures closing in the red. March NY world sugar #11 (SBH26) closed down -0.14 (-0.97%), while December London ICE white sugar #5 (SWZ25) closed down -3.70 (-0.89%). This marks a three-week-long slide for sugar prices, with NY sugar hitting a 5-year low and London sugar reaching a 4.75-year low.
The main driver behind the decline in sugar prices is the higher sugar output in Brazil. Unica, Brazil’s sugar industry association, reported that Brazil’s Center-South sugar output in the first half of October rose by +1.3% year-over-year to 2.484 million metric tons. Additionally, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills increased to 48.24% from 47.33% the same time last year. Cumulative 2025-26 Center-South sugar output through mid-October also rose by +0.9% y/y to 36.016 million metric tons.
The surplus in sugar production is not limited to Brazil. Datagro projected that Brazil’s Center-South 2026/27 sugar production will climb +3.9% y/y to a record 44 million metric tons. BMI Group and Covrig Analytics also forecasted global sugar surpluses for the 2025/26 season, further exacerbating the downward pressure on sugar prices.
India, the world’s second-largest sugar producer, is expected to contribute to the surplus with higher sugar exports. Abundant monsoon rains have led to a bumper sugar crop, with India’s Meteorological Department reporting a strong monsoon season. India’s National Federation of Cooperative Sugar Factories projected a +19% y/y increase in sugar production for the 2025/26 season. This follows a significant decline in sugar production in the previous year.
Thailand, the world’s third-largest sugar producer and second-largest exporter, is also projected to increase its sugar crop by +5% y/y for the 2025/26 season. The International Sugar Organization (ISO) forecasted a global sugar deficit for the 2025/26 season, marking the sixth consecutive year of deficits. However, the USDA predicts a record-high global sugar production for the same season, leading to an increase in ending stocks.
Overall, the outlook for sugar prices remains bearish due to the surplus in production and the forecasted global sugar deficit. Investors should keep a close eye on production trends in major sugar-producing countries like Brazil, India, and Thailand to gauge the direction of sugar prices in the future.
