Global sugar prices extended their week-long decline on Friday, with futures contracts tumbling to one-week lows amid a prevailing outlook for a significant global sugar surplus in the upcoming 2025/26 season. The bearish sentiment overshadowed some reports of tighter supplies in the current 2024/25 period, as market participants increasingly focus on future production prospects.
Futures Market Performance
On Friday, July NY world sugar #11 (SBN25) closed down -0.15, representing a -0.85% decrease. Similarly, August London ICE white sugar #5 (SWQ25) saw a decline of -2.90, or -0.59%. This sustained weakness pushed New York sugar to a five-week low, while London sugar also posted a one-week low, reflecting broad market pressure.
Shifting Global Supply Dynamics
The primary catalyst for the price fall is the growing expectation of a substantial global sugar surplus for the 2025/26 marketing year. Consultant Datagro projected a 2025/26 global sugar surplus of +1.53 million metric tons (MMT), a sharp recovery from an estimated 2024/25 global sugar deficit of -4.67 MMT. Further reinforcing this outlook, StoneX projects an even larger 2025/26 global sugar surplus of +3.74 MMT. These projections signal a significant shift from the current season’s supply dynamics, creating downward pressure on prices.
India’s Production Rebound
Signs of larger global sugar output are predominantly negative for prices. India, a major global producer, is expected to see a robust increase in its sugar production. The USDA’s Foreign Agricultural Service (FAS) predicted last Tuesday that India’s 2025/26 sugar production would rise by +26% year-over-year to 35 MMT. This optimistic forecast is attributed to favorable monsoon rains and an increase in sugar acreage. India’s Ministry of Earth Sciences projected an above-normal monsoon for this year, with total rainfall forecast to be 105% of the long-term average, running from June through September.
Adding to the supply outlook, the Indian government announced on January 20 that it would allow its sugar mills to export 1 MMT of sugar this season, easing restrictions that had been in place since October 2023 to maintain adequate domestic supplies. This contrasts with the 6.1 MMT allowed during the 2022/23 season, following a record 11.1 MMT in the season prior.
However, it is important to note that the Indian Sugar Mills Association (ISMA) projects India’s 2024/25 sugar production to fall -17.5% year-over-year to a five-year low of 26.2 MMT. ISMA also reported that India’s sugar production from October 1 to May 15 was 25.74 MMT, down -17% from the same period last year. Indian Food Secretary Chopra also indicated on May 1 that India’s 2024/25 sugar exports might only total 800,000 MT, below earlier expectations.
Brazil’s Anticipated Growth
Brazil, the world’s largest sugar producer, is also expected to contribute to the increased global supply in the upcoming season. The USDA’s FAS predicted on April 23 that Brazil’s 2025/26 sugar production would climb +2.3% year-over-year to 44.7 MMT, up from 43.7 MMT in the previous season. Conab, Brazil’s government crop forecasting agency, further forecasted on April 29 that Brazil’s 2025/26 sugar production would climb +4.0% year-over-year to 45.875 MMT.
Conversely, for the current season, Unica reported on Tuesday that Brazil’s 2025/26 Center-South sugar production for April fell -38.6% year-over-year to 1.58 MMT. Moreover, Unica’s report on April 14 indicated that cumulative 2024/25 Brazil Center-South sugar output through March fell by 5.3% year-over-year to 40.169 MMT. Conab had also projected in the previous month that Brazil’s 2024/25 sugar production would fall -3.4% year-over-year to 44.118 MMT, citing lower sugarcane yields due to drought and excessive heat, with Green Pool Commodity Specialists noting a potential loss of up to 5 MMT of sugarcane due to fires.
Thailand’s Contribution
The outlook for higher sugar production in Thailand also presents a bearish factor for prices. On May 2, Thailand’s Office of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar production rose +14% year-over-year to 10.00 MMT. Thailand stands as the world’s third-largest sugar producer and the second-largest sugar exporter, making its output significant for global supply.
Current Season’s Tighter Market
Despite the strong outlook for 2025/26, the current 2024/25 season has shown some signs of a tighter market. The International Sugar Organization (ISO) on Thursday raised its 2024/25 global sugar deficit forecast to a nine-year high of -5.47 MMT, up from a February forecast of -4.88 MMT. The ISO also cut its 2024/25 global sugar production forecast to 174.8 MMT from 175.5 MMT previously, indicating a tightening market compared to the 2023/24 global sugar surplus of 1.31 MMT.
However, the USDA, in its bi-annual report released November 21, projected that global 2024/25 sugar production would climb +1.5% year-over-year to a record 186.619 MMT, with global human sugar consumption increasing +1.2% year-over-year to a record 179.63 MMT. The USDA also forecasted that 2024/25 global sugar ending stocks would decline -6.1% year-over-year to 45.427 MMT, presenting a complex picture for the current season.
Ultimately, the market’s focus remains firmly on the anticipated surge in global sugar supplies for the 2025/26 season. While the current 2024/25 period presents a mixed bag of production challenges and deficits, the strong projections from leading consultants and agricultural agencies for the next season are predominantly driving the bearish sentiment and the recent downward trend in sugar prices.
