Sugar Prices Climb on Weaker Dollar and Signs of Stronger Global Demand

Sugar markets found support on Tuesday, lifted by a softer U.S. dollar and fresh evidence of rising international demand. October New York world sugar #11 gained 0.50% to reach a four-week high, while December London ICE white sugar added 1.30%, marking its highest level in a week and a half.

A weaker dollar helped fuel buying interest since commodities priced in dollars become cheaper for overseas buyers. Adding to the bullish momentum, Pakistan placed urgent orders for 320,000 metric tons of sugar, signaling strong import demand.

Recent Lows and Supply Outlook

The gains come just one week after sugar futures plunged to multi-year lows. On that day, New York sugar hit its lowest level in over four years, while London sugar slipped to its weakest in nearly the same span. Analysts attributed the downturn to expectations of abundant global supplies.

Research group StoneX recently flipped its outlook from deficit to surplus, projecting a +2.8 million metric ton global surplus for the 2025/26 season. This compares to a -4.7 million ton shortfall in 2024/25.

Brazil, India, and Thailand Add Pressure

Sugar prices under pressure — see how commercial traders are reacting in Asia.

• Brazil: Production in the Center-South region rose 18% year-over-year in late August, reaching 3.87 MMT. Mills diverted more cane to sugar instead of ethanol, with 54.2% of crushed cane going to sugar versus 48.8% last year. Still, cumulative 2025/26 output remains slightly behind at 26.76 MMT, down 1.9% from a year ago.
• India: Sucden forecasts the country may divert 4 MMT of sugar to ethanol in 2025/26. But with higher cane acreage and favorable monsoon rains, India’s sugar output is expected to rebound +19% year-on-year to 34.9 MMT, raising the potential for larger exports.
• Thailand: The world’s third-largest producer lifted its 2024/25 output by 14% to 10 MMT, adding more pressure to global supply.

Global Forecasts Signal Oversupply Risks

The International Sugar Organization (ISO) estimates a small global deficit of -231,000 MT in 2025/26, narrowing sharply from last year’s nearly -5 MMT shortfall. Meanwhile, the USDA projects a very different picture — a record 189.3 MMT of global sugar production, up 4.7% year-over-year, with ending stocks rising 7.5% to 41.2 MMT.

Czarnikow, another commodities trader, is even more bearish, forecasting a 7.5 MMT surplus for 2025/26, the largest in eight years.

Weather and Quality Factors

Despite forecasts for larger crops, weather and quality remain wildcards.

• West Africa saw its driest 60-day stretch since 1979, raising concerns about pod development.
• In India, the 2025 monsoon season delivered 8% above-average rainfall, the strongest in five years, supporting higher yields.
• Nigeria projects an 11% year-over-year drop in 2025/26 output to 305,000 MT.

Bottom Line

Sugar’s short-term rally is being powered by currency weakness and stronger demand signals, but the medium-term outlook remains weighed down by expectations of bumper crops in Brazil, India, and Thailand. Traders remain cautious as rising supplies could overshadow demand growth and put a cap on prices.

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