March NY world sugar #11 (SBH26) on Thursday closed up +0.27 (+1.67%), and December London ICE white sugar #5 (SWZ25) closed up +5.90 (+1.30%).
Sugar prices settled sharply higher on Thursday due to concerns over lower sugarcane yields in Brazil. Unica reported Thursday that Brazil’s Center South sugarcane crush in the first half of September was up +6.9% y/y to 46 MMT. However, the sugar content in the cane declined, signaling lower sugar production as the sugar content in crushed cane dropped to 154.58 kilogram per ton (kg/ton) versus 160.07 kg/ton a year earlier.
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On Tuesday, NY sugar rallied to a 1.5-month nearest-futures (V25) high, and London sugar climbed to a 2-week high on signs of stronger global demand as Pakistan has placed orders for a total of 320,000 MT of sugar for immediate delivery.
Last Tuesday, NY sugar posted a 4.25-year nearest-futures low, and London sugar posted a 4-year low as they extended their 7-month downtrend due to prospects of abundant global sugar supplies. Last Tuesday, StoneX projected a global sugar surplus of +2.8 MMT for the upcoming 2025/26 season, switching from a deficit of -4.7 MMT in the 2024/25 season.
Higher sugar output in Brazil is bearish for prices. Unica reported Thursday that Brazil’s Center-South sugar output in the first half of September rose by +15.7% y/y to 3.622 MT. Also, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the second half of August increased to 53.49% from 47.74% the same time last year. However, cumulative 2025-26 Center-South sugar output through mid-September fell -0.1% y/y to 30.388 MMT.
The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop. India’s Meteorological Department reported Tuesday that the cumulative monsoon rain in India as of September 30 was 937.2 mm, 8% above normal and the strongest monsoon in 5 years.
The outlook for higher sugar production in India is bearish for prices. On June 2, India’s National Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar production would climb +19% y/y to 34.9 MMT, citing larger planted cane acreage. That would follow a -17.5% y/y decline in India’s sugar production in 2024/25 to a 5-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).
Another bearish factor for sugar was the recent assertion from sugar trader Sucden that India may divert 4 MMT of sugar to make ethanol in 2025/26, which is not enough to ease the country’s sugar surplus and may prompt India’s sugar mills to export as much as 4 MMT of sugar, above earlier expectations of 2 MMT. India is the world’s second-largest sugar producer.
The outlook for higher sugar production in Thailand is bearish for prices after the Thai Sugar Miller Corp on Wednesday projected that Thailand’s 2025/26 sugar crop will increase by +5% y/y to 10.5 MMT. On May 2, Thailand’s Office of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar production rose +14% y/y to 10.00 MMT. Thailand is the world’s third-largest sugar producer and the second-largest exporter of sugar.
On August 29, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficits. The ISO projects a global 2025/26 sugar deficit of -231,000 MT, improving from a -4.88 MMT shortfall in 2024/25. The ISO also projects 2025/26 global sugar production will rise by +3.3% y/y to 180.6 MMT, and 2025/26 global sugar consumption will increase +0.3% y/y to 180.8 MMT.
Expectations for abundant sugar supplies are bearish for prices. On June 30, commodities trader Czarnikow projected a 7.5 MMT global sugar surplus for the 2025/26 season, the largest surplus in 8 years. On May 22, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% y/y to a record 189.318 MMT, with global sugar ending stocks at 41.188 MMT, up 7.5% y/y.
On August 19, Conab, Brazil’s government crop forecasting agency, cut its Brazil 2025/26 production estimate by 3.1% to 44.5 MMT from a previous estimate of 45.9 MMT. In July, Conab reported that 2024/25 Brazil sugar production fell by -3.4% y/y to 44.118 MMT, citing lower sugarcane yields due to drought and excessive heat.
The USDA, in its bi-annual report released May 22, projected that global 2025/26 sugar production would climb +4.7% y/y to a record 189.318 MMT and that global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT. The USDA also forecasted that 2025/26 global sugar ending stocks would climb +7.5% y/y to 41.188 MMT. The USDA’s Foreign Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar production would rise +2.3% y/y to a record 44.7 MMT FAS predicted that India’s 2025/26 sugar production would rise +25% y/y to 35.3 MMT due to favorable monsoon rains and increased sugar acreage. FAS predicted that Thailand’s 2025/26 sugar production will climb +2% y/y to 10.3 MMT.
On the date of publication,
Rich Asplund
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