Sugar Prices Experience Significant Drop as Supply Concerns Diminish
Monitoring Market Trends
Recent developments in the sugar market indicate that prices have sharply declined, echoing significant shifts in global supply dynamics. On October 13, 2025, March NY world sugar #11 (SBH26) closed down by 0.49 to settle at a loss of 3.04%. Meanwhile, December London ICE white sugar #5 (SWZ25) fell by 6.40, marking a 1.42% decrease. This recent downturn continues a downward trend, with NY sugar reaching a three-week low and London sugar touching its lowest point in over four years for nearest futures.
Supply Factors Influencing Prices
Sugar prices have been under pressure for seven consecutive months, with NY sugar hitting a 4.5-year low (SBV25) just last month. The primary driver behind this decline has been a significant surge in sugar output from Brazil. According to reports from Unica, Brazil’s Center-South sugar output soared by 15.7% year-on-year, totaling 3.622 million tonnes during the first half of September. Remarkably, the proportion of sugarcane crushed for sugar by Brazilian mills jumped to 53.49%, up from 47.74% in the same period last year. However, cumulative sugar output for the 2025-26 season, through mid-September, showed a slight decline of 0.1% year-over-year, amounting to 30.388 million tonnes.
Global Supply Outlook
The forecast for global sugar supplies is also significantly influencing the bearish price trend. The BMI Group anticipates a global sugar surplus of 10.5 million tonnes for the 2025/26 period, while Covrig Analytics projects a more conservative surplus of 4.1 million tonnes. Contributing to this negative outlook are increased sugar exports from India, driven by exceptional monsoon rains that have resulted in an abundant sugar crop. As reported by India’s Meteorological Department, the cumulative monsoon rainfall recorded as of September 30 was at 937.2 mm—8% higher than normal and marking the most robust monsoon in the last five years.
Potential Production Changes in India
Amid this changing landscape, the National Federation of Cooperative Sugar Factories predicts a remarkable 19% increase in India’s sugar production for the 2025/26 season, forecasting totals of around 34.9 million tonnes. This projection comes after a challenging previous season, which witnessed a significant decline of 17.5%, marking a five-year low at 26.2 million tonnes, as noted by the Indian Sugar Mills Association (ISMA). Another noteworthy development is Sucden’s analysis indicating that India may divert as much as 4 million tonnes of sugar for ethanol production during the same period. This shift could push exports to around 4 million tonnes, eclipsing initial estimates of 2 million tonnes.
Trends in Thailand’s Sugar Production
The sugar production outlook in Thailand has also turned bearish. The Thai Sugar Miller Corp projects a 5% year-on-year increase for the 2025/26 crop, estimating production to reach 10.5 million tonnes. In the 2024/25 season, the Office of the Cane and Sugar Board reported a significant 14% increase from the previous year, tallying 10.0 million tonnes. As the world’s third-largest sugar producer and second-largest exporter, Thailand’s changing production metrics could significantly sway global market dynamics.
Recent Market Activity
Interestingly, a brief uptick in sugar prices occurred on October 2 when NY sugar approached a one-and-a-quarter-month high. This surge was largely driven by indications of lower sugar content from Brazil’s sugarcane harvest. Unica reported a drop in sugar content in Brazil’s Center-South sugarcane crushed in early September, falling to 154.58 kg per ton, down from 160.07 kg per ton a year earlier. Additionally, the International Sugar Organization (ISO) had predicted a global sugar deficit for the 2025/26 season, citing it would be the sixth consecutive year of deficits, estimating a shortfall of 231,000 tonnes—an improvement from the previous year’s deficit of 4.88 million tonnes. The USDA also expects a 4.7% year-on-year increase in global sugar production for the 2025/26 season, estimating it to reach 189.318 million tonnes.
Conclusion: Navigating the Sugar Market Landscape
Overall, the outlook for sugar prices appears distinctly bearish due to the rising global production forecasts and ample supply from major producers like Brazil and India. As these dynamics evolve, stakeholders within the sugar market must pay close attention to production trends, rainfall patterns, and export levels. A comprehensive understanding of these factors will be essential for anticipating future price movements and effectively strategizing investments in the sugar market.