Sugar prices fall as higher Indian output weighs on market
Global sugar prices slipped as higher output forecasts from India and other key producers reinforced expectations of a supply surplus. Increased Indian production, lower ethanol diversion, and additional export approvals added pressure, though a stronger Brazilian real and potential short-covering by funds helped limit deeper market losses.
Global sugar prices declined on Tuesday after higher production estimates from India, the world’s second-largest sugar producer, added pressure to the market, Nasdaq reported.
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) projected India’s 2025/26 sugar output at 29.3 million metric tonnes (MMT), marking a 12 per cent increase from a year earlier. Earlier, ISMA reported that production between October 1 and January 15 rose 22 per cent year-on-year to 15.9 MMT.
The industry body also reduced its estimate of sugar diverted for ethanol production to 3.4 MMT from its earlier forecast of 5 MMT, potentially freeing up more supplies for export. On February 13, the Indian government approved an additional 500,000 tonnes of sugar exports for the 2025/26 season, adding to the 1.5 MMT cleared in November.
Despite the downward pressure, losses were limited by strength in Brazil’s currency. The Brazilian real climbed to a 1.75-year high against the US dollar, making exports less attractive for Brazilian producers.
Production trends in Brazil also provided mixed signals. Industry group Unica reported that sugar output in the country’s Centre-South region fell 36 per cent year-on-year to 5,000 tonnes in the second half of January. However, cumulative production for the 2025/26 season through January rose 0.9 per cent to 40.24 MMT. The share of cane allocated for sugar production increased to 50.74 per cent from 48.14 per cent a year earlier.
Market positioning could also influence price movements. The latest weekly data showed funds increased their net short positions in New York sugar futures and options to a record 265,324 contracts in the week ended February 17, raising the possibility of short-covering if prices rebound.
Earlier this month, sugar prices dropped to their lowest levels in more than five years amid concerns about a prolonged global surplus. On February 11, sugar trader Czarnikow forecast a global surplus of 3.4 MMT for 2026/27, following an 8.3 MMT surplus in 2025/26. It later raised its 2025/26 surplus estimate to 8.7 MMT.
Other analysts also expect excess supply. Green Pool Commodity Specialists projected a 2.74 MMT surplus for 2025/26 and a smaller surplus in 2026/27, while StoneX forecast a 2.9 MMT surplus for 2025/26.
In Brazil, consulting firm Safras & Mercado said sugar production in 2026/27 could fall 3.91 per cent to 41.8 MMT from an expected 43.5 MMT in 2025/26. Exports are also projected to decline 11 per cent to 30 MMT.
Thailand’s outlook has added to supply concerns. The Thai Sugar Millers Corporation projected the country’s 2025/26 sugar crop at 10.5 MMT, up 5 per cent from a year earlier. Thailand is the world’s third-largest sugar producer and second-largest exporter.
The International Sugar Organization (ISO) forecast a global sugar surplus of 1.625 MMT in 2025/26 after a deficit in 2024/25, citing higher output in India, Thailand and Pakistan. It expects global production to rise 3.2 per cent to 181.8 MMT.
Meanwhile, the United States Department of Agriculture (USDA) projected global sugar production to climb 4.6 per cent year-on-year to a record 189.318 MMT in 2025/26. It expects global consumption to increase 1.4 per cent to 177.921 MMT, while ending stocks are forecast to decline 2.9 per cent to 41.188 MMT.
The USDA’s Foreign Agricultural Service said Brazil’s 2025/26 sugar output could reach a record 44.7 MMT, up 2.3 per cent from a year earlier. India’s production is projected to rise 25 per cent to 35.25 MMT, supported by favourable monsoon rains and higher acreage. Thailand’s output is expected to increase 2 per cent to 10.25 MMT.
To Read more about Sugar Industry continue reading Agriinsite.com
Source : Chinimandi
