Smaller Indian Sugar Exports Boost Sugar Prices
Sugar futures rose to three-week highs after India reduced its 2025-26 export quota to 1.5 MMT, tightening supply expectations. This comes after prices recently hit multi-year lows on forecasts of a global surplus driven by record Brazilian output. Brazil’s CS production continues to climb, while India’s sugar output estimate has been raised to 31 MMT for 2025-26.
March NY world sugar #11 (SBH26) on Friday closed up +0.52 (+3.60%), and March London ICE white sugar #5 (SWH26) closed up +13.20 (+3.20%).
Sugar prices rallied to 3-week highs on Friday amid tighter supplies from India. India’s food ministry on Friday said that it will allow mills to export 1.5 MMT of sugar in the 2025/26 season, below earlier estimates of 2 MMT. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.
The outlook for robust global sugar supplies has hammered sugar prices over the past month. On Monday, London sugar posted a new 4.75-year nearest-futures low, and last Thursday, NY sugar prices slumped to a 5-year nearest-futures low, mainly due to higher sugar output in Brazil and talk of a global sugar surplus. Last Wednesday, sugar trader Czarnikow boosted its global 2025/26 sugar surplus estimate to 8.7 MMT, up +1.2 MMT from a September estimate of 7.5 MMT.
The outlook for record sugar output in Brazil is bearish for prices. Last Tuesday, Conab, Brazil’s crop forecasting agency, raised its Brazil 2025/26 sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT. Unica reported today that Brazil’s Center-South sugar output in the second half of October rose by +16.4% y/y to 2.068 MT. Also, the percentage of sugarcane crushed for sugar by Brazil’s sugar mills in the second half of October increased to 46.02% from 45.91% the same time last year. In addition, cumulative 2025-26 Center-South sugar output through October rose +1.6% y/y to 38.085 MMT. In related news, Datagro on October 21 projected that Brazil’s Center-South 2026/27 sugar production will climb +3.9% y/y to a record 44 MMT.
Signs of a larger sugar crop in India, the world’s second-largest producer, are undercutting prices after the India Sugar Mill Association (ISMA) on Tuesday raised its 2025/26 India sugar production estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% y/y. The ISMA also cut its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, which may allow India to boost its sugar exports.
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Source : BarChart
