Sugar prices under pressure amid outlook of strong supplies
Global sugar prices remain under pressure amid rising output in India and Brazil and expectations of a global surplus. However, firm crude oil prices are offering support by boosting ethanol demand. The market stays balanced between strong supply fundamentals and energy-linked factors limiting further downside.
New Delhi: Global sugar prices edged lower on Mondday, weighed down by expectations of higher output and ample supplies, although a sharp rise in crude oil prices helped limit the decline.
Prices in both New York and London markets have been under pressure in recent sessions, with sugar touching multi-week lows last week amid improving production outlooks. Sentiment weakened further after India signalled it would allow exports to continue this year, easing concerns of supply tightening, Barchart reported.
However, gains in crude oil prices provided some support to the market. Higher oil prices tend to boost ethanol values, encouraging mills to divert more sugarcane towards ethanol production, which can reduce sugar output and cap losses in prices.
Data from National Federation of Cooperative Sugar Factories Ltd. showed that India’s sugar production rose 9 per cent year-on-year to 27.12 million tonnes during October–March of the 2025–26 season, adding to global supply pressures.
Brazil, the world’s largest sugar producer, has also reported higher output. Industry body Unica said sugar production in the Centre-South region rose marginally to 40.25 million tonnes, with mills allocating a larger share of cane for sugar production compared to last year.
Market sentiment has also been influenced by forecasts of a global surplus. Estimates by firms such as Czarnikow, Green Pool Commodity Specialists and StoneX point to excess supply continuing into the next season.
The International Sugar Organization has projected a global surplus of 1.22 million tonnes in 2025–26, driven by higher production in countries including India, Thailand and Pakistan, with global output expected to rise 3 per cent year-on-year.
At the same time, supply disruptions linked to the closure of the Strait of Hormuz have offered some support, with analysts estimating that about 6 per cent of global sugar trade has been affected.
India’s export policy has also added pressure on prices. The government has approved additional export quotas for the current season, raising expectations of higher shipments from the world’s second-largest producer.
Meanwhile, the US Department of Agriculture has forecast record global sugar production of 189.3 million tonnes in 2025–26, further reinforcing the outlook of abundant supplies despite steady growth in consumption.
Overall, the market remains caught between strong production trends weighing on prices and firm crude oil markets offering intermittent support.
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Source : Chinimandi
