Sugar Prices Retreat as Global Production Increases

Sugar Prices fell on Wednesday, with London sugar hitting a 2.5-month low. Rising output in major producing countries is creating downward pressure on the market. Traders now expect larger global supplies to weigh on prices in the near term.

Brazil’s Record Sugar Output

Brazil, the world’s largest sugar producer, continues to increase output. Unica reported that Center-South sugar production for 2025-26 through December rose 0.9% year-on-year to 40.222 million metric tons (MMT). The sugarcane crush ratio also rose to 50.82% from 48.16% last season. Conab, Brazil’s crop forecasting agency, raised its production forecast to 45 MMT for 2025/26. This higher output is bearish for Sugar Prices.

India’s Expanding Production

India, the world’s second-largest sugar producer, is also boosting supply. ISMA reported 15.9 MMT of sugar production from October 1 to January 15, up 22% year-on-year. ISMA revised its full 2025/26 forecast to 31 MMT. Reduced allocation for ethanol—from 5 MMT to 3.4 MMT—could free more sugar for exports. The Indian government may allow additional exports to reduce domestic stockpiles. These factors are adding further pressure on Sugar Prices globally.

Global Sugar Surplus Outlook

The International Sugar Organization (ISO) forecasts a 1.625 MMT surplus in 2025-26, compared with a 2.916 MMT deficit in 2024-25. Covrig Analytics also raised its global surplus estimate to 4.7 MMT. Thailand, the third-largest sugar producer, expects a 5% increase to 10.5 MMT. Higher global supply is keeping Sugar Prices under pressure.

Future Price Support

Despite the bearish short-term outlook, potential supply declines in Brazil may support prices. Safras & Mercado projects Brazil’s 2026/27 sugar output to fall 3.91% to 41.8 MMT, while exports may decline 11% year-on-year. The USDA forecasts 2025/26 global sugar production at a record 189.318 MMT, with consumption at 177.921 MMT and ending stocks slightly lower. These dynamics may stabilize Sugar Prices in the coming year.

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