Sugar Prices See Support on Year-End Positioning
Sugar prices rose on short-covering in thin holiday trade. Market sentiment remains bearish due to larger expected crops in India, Brazil, and Thailand, along with forecasts of a global surplus in 2025/26. India’s higher production and reduced ethanol diversion may boost exports, further pressuring prices despite brief recoveries.
March NY world sugar #11 (SBH26) on Monday closed up +0.17 (+1.15%), and March London ICE white sugar #5 (SWH26) closed up +0.80 (+0.19%).
Sugar prices on Monday continued higher on some short-covering ahead of the year-end Christmas and New Year’s holidays, a time of thin trading and reduced liquidity. Sugar prices have rebounded higher from last Thursday’s 5-week low.
Last Thursday, sugar prices fell to 5-week lows amid prospects of higher sugar exports from India, after India’s food secretary said the government may permit additional sugar exports to reduce a domestic supply glut. Last month, India’s food ministry said it would allow mills to export 1.5 MMT of sugar in the 2025/26 season. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.
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 November 11 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. Meanwhile, the India Sugar Mill Association (ISMA) reported on December 15 that Indian 2025-26 sugar production from October 1 to December 15 jumped +28% y/y to 7.83 MMT.
The outlook for record sugar output in Brazil is also bearish for prices. Conab, Brazil’s crop forecasting agency, on November 4 raised its Brazil 2025/26 sugar production estimate to 45 MMT from a previous forecast of 44.5 MMT. Unica reported on December 16 that Brazil’s cumulative 2025-26 Center-South sugar output through November rose by +1.1% y/y to 39.904 MMT. Also, the amount of cane crushed for sugar rose to 51.12% in 2025/36 from 48.34% in 2024/25.
On the bearish side for sugar, the International Sugar Organization (ISO) on November 17 forecast a 1.625 million MT sugar surplus in 2025-26, following a 2.916 million MT deficit in 2024-25. ISO said the surplus is being driven by increased sugar production in India, Thailand, and Pakistan. In August, ISO had previously forecast a 231,000 MT deficit for the 2025-26 marketing year. ISO is forecasting a +3.2% y/y rise in global sugar production to 181.8 million MT in 2025-26. Meanwhile, sugar trader Czarnikow on November 5 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 higher sugar production in Thailand is bearish for prices. The Thai Sugar Millers Corp on October 1 projected that Thailand’s 2025/26 sugar crop will increase by +5% y/y to 10.5 MMT. Thailand is the world’s third-largest sugar producer and the second-largest exporter.
The USDA, in its bi-annual report released on December 16, projected that global 2025/26 sugar production would climb +4.6% y/y to a record 189.318 MMT and that global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT. The USDA also forecast that 2025/26 global sugar ending stocks would fall by -2.9% y/y to 41.188 MMT. The USDA’s Foreign Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar production would rise by 2.3% y/y to a record 44.7 MMT. FAS also predicted that India’s 2025/26 sugar production would increase by 25% y/y to 35.25 MMT, driven by favorable monsoon rains and increased sugar acreage. In addition, FAS predicted that Thailand’s 2025/26 sugar production will increase by +2% y/y to 10.25 MMT.
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Source : BarChart
