Global sugar prices extend weekly fall on surplus supply concerns
Global sugar prices extended their decline, hitting multi-week lows amid strong output in India and Brazil and expectations of a global surplus. Easing export restrictions and lower ethanol diversion are boosting supply, outweighing geopolitical disruptions, keeping overall market sentiment bearish despite earlier crude-driven price support.
Global sugar prices continued to decline on Friday, extending a week-long fall as markets reacted to signs of ample supply. Prices in New York dropped to their lowest level in five weeks, while London markets touched a four-week low, reflecting weak sentiment barchart reported.
Adding to the pressure, India’s Food Secretary earlier this week said the government has no plans to restrict sugar exports this year. The statement eased fears that more sugar would be diverted for ethanol production following disruptions in crude oil supplies linked to tensions involving Iran.
Data released by the National Federation of Cooperative Sugar Factories Ltd. also weighed on prices. The body reported that India’s sugar output for the 2025-26 season, between October and March, rose 9% compared to a year earlier to 27.12 million tonnes.
Higher production in Brazil has further added to the downward trend. According to Unica, sugar output in the country’s key Center-South region edged up 0.7% year-on-year to 40.25 million tonnes during the same period, with mills allocating a larger share of cane for sugar production.
Just days earlier, however, sugar prices had surged to multi-month highs, supported by a sharp rise in crude oil prices. Higher oil prices tend to boost ethanol demand, which can lead mills to divert more sugarcane toward fuel production instead of sugar.
Some support for prices has also come from supply disruptions linked to the closure of the Strait of Hormuz, which analysts say has affected around 6% of global sugar trade and limited refined sugar output.
Despite these factors, the broader outlook remains bearish. Prices had already dropped to multi-year lows last month amid expectations of a global surplus. Several market analysts have projected excess supply in the coming seasons, including estimates of 3.4 million tonnes by Czarnikow and around 2.9 million tonnes by StoneX.
The International Sugar Organization has also forecast a surplus of 1.22 million tonnes in 2025-26, reversing a deficit seen the previous year. The organisation attributed this to increased production in countries such as India, Thailand and Pakistan, and expects global output to rise 3% to 181.3 million tonnes.
In India, the Indian Sugar and Bio-energy Manufacturers Association has projected sugar production at 29.3 million tonnes for 2025-26, up 12% from the previous year, although slightly below earlier estimates. It has also reduced the expected use of sugar for ethanol, which could leave more supply available for exports.
Government policy is also playing a role. Earlier this year, New Delhi approved an additional 500,000 tonnes of sugar exports for the 2025-26 season, taking the total permitted exports to 2 million tonnes.
Meanwhile, the United States Department of Agriculture has projected global sugar production to reach a record 189.3 million tonnes in 2025-26, with consumption also rising but at a slower pace. This imbalance is expected to keep pressure on prices despite a slight decline in global stock levels.
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Source : Chinimandi
