Global sugar prices down due to increasing sugar production in Brazil
Global sugar prices face pressure from rising production in Brazil and expectations of surplus, despite support from high crude oil prices and trade disruptions. Increased output in India and Thailand adds to supply, while lower ethanol diversion boosts exports, keeping the market balanced but slightly bearish overall.
Sugar prices faced pressure on Friday as higher production in Brazil added to supply in the global market, even as concerns over energy prices and trade disruptions offered some support, Barchart reported.
Industry data released by Unica showed that sugar production in Brazil’s key Center-South region edged up 0.7% year-on-year to 40.25 million metric tonnes for the 2025–26 season so far. Mills in the region increased the share of cane used for sugar production to 50.61%, compared with 48.08% a year earlier, signalling a shift away from ethanol.
Despite the downward pressure, prices had recently climbed to a five-and-a-half-month high in New York, supported by a sharp rise in crude oil prices. Stronger oil markets tend to make ethanol more attractive, which can reduce sugar output if mills divert cane accordingly.
Additional support came from disruptions in global trade following the closure of the Strait of Hormuz. Analysts said the shutdown has affected around 6% of global sugar trade, tightening refined sugar supplies.
However, the broader outlook remains weighed down by expectations of a global surplus. Earlier this month, prices dropped to their lowest level in over five years amid forecasts of excess supply in the coming seasons.
Several market estimates point to continued surplus. Czarnikow projected a global surplus of 3.4 million tonnes for 2026–27, after an estimated 8.3 million tonnes surplus in 2025–26. Green Pool Commodity Specialists and StoneX also forecast surpluses for the upcoming seasons, though at varying levels.
The International Sugar Organization has also shifted its outlook, projecting a surplus of 1.22 million tonnes in 2025–26, compared to a deficit in the previous season. The increase is mainly attributed to higher production in India, Thailand and Pakistan, with global output expected to rise by 3% year-on-year.
In India, production has shown strong growth. The Indian Sugar and Bio-energy Manufacturers Association reported a 10.5% rise in output to 26.2 million tonnes between October and mid-March. The association expects total production for the season to reach 29.3 million tonnes, up 12% from last year, although slightly lower than earlier estimates.
Lower diversion of sugar for ethanol production in India is also expected to increase export availability. The government has already approved additional export quotas, raising expectations of higher shipments from the world’s second-largest producer.
Global projections from the United States Department of Agriculture indicate that sugar production could reach a record 189.3 million tonnes in 2025–26, while consumption is also set to rise. Even so, ending stocks are expected to decline slightly, reflecting steady demand.
With higher output from major producers such as Brazil, India and Thailand, the global sugar market continues to balance between rising supply and intermittent support from energy markets and trade disruptions.
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Source : Chinimandi
