Sugar Prices Plummet Amidst Global Sugar Surplus Projections
The world sugar market has taken a significant hit, with prices plummeting to new lows due to robust global sugar supplies. On Tuesday, the March New York world sugar contract (SBH26) closed down -0.48 (-3.05%), while the December London ICE white sugar contract (SWZ25) lost -13.50 (-3.02%) of its value.
The downward trend in sugar prices can be attributed to the increasing supply projections from leading sugar-producing countries. On Tuesday, Datagro consultancy projected that Brazil’s Center-South 2026/27 sugar production will rise by +3.9% year-over-year (y/y) to a record 44 million metric tons (MMT). This is part of a larger trend in which global sugar production is expected to reach new heights.
Last Monday, BMI Group projected a global 2025/26 sugar surplus of 10.5 MMT, while Covrig Analytics forecasted a global 2025/25 sugar surplus of 4.1 MMT the following day. These predictions have weighed heavily on sugar prices, contributing to their downward trajectory over the past seven months.
The supply glut has been exacerbated by rising output in Brazil, where major sugarcane producers have seen their yields surge due to favorable weather conditions and improved agricultural practices. Unica reported last Thursday that Brazil’s Center-South sugar output for the second half of September registered a significant increase, with a +10.8% y/y rise to 3.137 million metric tons.
Furthermore, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the same period increased to 51.17% from last year’s figure of 47.73%. This trend is expected to continue into 2025/26, with cumulative Center-South sugar output through September already showing a +0.8% y/y rise to 33.524 MMT.
On top of this surplus, India’s outlook for higher sugar exports due to abundant monsoon rains may further pressure global prices. The recent assertion by sugar trader Sucden that India may divert up to 4 million metric tons (MMT) of sugar to make ethanol in 2025/26 only adds to the bearish sentiment, as this amount would not be sufficient to alleviate India’s own sugar surplus.
In fact, India is expected to become a net exporter of sugar, according to latest data from major sugar-producing nations like the Brazilian industry association’s Unica and others. Last week, it was announced that Thailand’s 2025/26 crop will increase by +5% y/y to 10 million metric tons.
Thailand’s Office of the Cane and Sugar Board projected a significant rise year-over-year in sugar production last May as well, showing a +14% jump in 2024/25 to 10 million metric tons. The outlook from major players has solidified this shift towards increased supply side capacity with all forecasts predicting surging markets ahead.
The International Sugar Organization (ISO) also forecast a global sugar deficit for the 2025/26 season which would be the sixth consecutive year of deficits since 2020. According to their projections, a global sugar deficit of –231,000 metric tons was seen by them as they reported in April this year and is now trending upward towards –4.88 MMT from last season’s numbers.
According to all available data available until present date, USDA on May 22 has published its bi-annual report which shows that global 2025/26 sugar production would rise +4.7% y/y to a record 189318 MT and their forecasted global 2025/26 human consumption will continue upward at +1.4% y/y to 177,921 metric tons.
Therefore, global ending stocks for the season as forecasted are predicted in an upward trend at +7.5% from previous numbers last year with USDA’s report forecasting -231,000 less deficit as against +231 MT. Also their Foreign Agricultural Service (FAS) projections indicate a possible surge of up to 44.7 MMT in Brazil alone and additional rises elsewhere among producers, that further strengthen expectation on increase supply side capacity ahead.
All these factors culminated into a scenario where sugar prices continued their downturn during this period and even reached levels not seen before for any given month or year since data collection has started.
Bearish Factor of Diversification of Sugar Usage
An interesting development which has been impacting sugar price in recent months is the diversion of sugarcane juice from producing ethanol fuel. This shift towards ethanol production is particularly striking in countries with abundant sugarcane production capacity such as India and Brazil.
According to reports available, one prominent trader in this field estimated that an amount not less than 4 million metric tons would be diverted this year alone for conversion into transportation fuel. As a result sugar mill owners from India reported rising fears for meeting demand requirements amid shrinking exports of their own products.
Thai Mills Prepare for Sugar Deficits Amid Increased Output
The projections from leading analysts suggest significant growth ahead, but the industry remains cautious as global prices slide further downward due to an anticipated global deficit in the coming season. The latest survey conducted recently among major millers indicated that output is poised rise dramatically in future despite their deep concern over impact of rising deficits in this very area.
In response to this expected trend and other factors at play here now, many Thai-based sugar companies have expressed fears for increased production levels as they prepare for the possibility of reduced exports during next crop year. Despite rising forecasted demand figures ahead.
USDA’s Bi-Annual Report on Global Sugar Supplies
This data provides key insights into developments globally across production sectors impacted by supply chains influenced by climate variability along with other market forces. This global overview of production patterns across major regions offers deeper context understanding towards informed decision-making strategies relevant here.
Given these projections and others mentioned previously, USDA’s report forecasts 2025/26 worldwide sugar production will climb +4.7% to a record high followed closely by the expected slight uptick in consumption also rising by only 1.4%. This upward creep could lead to large stocks that then weigh heavily on world markets contributing still more downward pressure on prices going forward.
Sugar Price Reaching New Lows Amid Global Supply Glut
Following significant production increases and favorable weather, global sugar supplies are expected to outpace demand for a record six consecutive years.
However, with a + 2.3% rise in Brazil’s Center-South 2025/26 sugar production forecasted by the USDA as reported last week, coupled with predictions of growing world demand for 2026 global output being pegged at a mere +0.3%, this surplus has created uncertainty leading consumers back to low spot prices now seen below four year historical marks.
Asian Sugar Prices Declining
The global commodity price index declined by 4% in September 2025 according to reports available until last update, while Asian sugar futures, which make up nearly half the total traded globally – hit its one month and also six week lows respectively.
