March NY world sugar #11 (SBH26) on Tuesday closed down -0.18 (-1.07%), and December London ICE white sugar #5 (SWZ25) closed down -6.40 (-1.38%).Sugar prices gave up an early advance on Tuesday and turned lower, with NY sugar falling from a 1.75-month nearest-futures high. Sugar prices retreated after Covrig Analytics projected a +4.1 MMT global sugar surplus for the 2025/26 season.
NY sugar initially climbed to a 1.75-month high on Tuesday on signs of lower sugar content from this year's Brazil sugar crush. Last Thursday, Unica reported that the sugar content in Brazil's Center-South sugarcane crushed cane in the first half of September dropped to 154.58 kilograms per ton (kg/ton) compared to 160.07 kg/ton in the same period a year earlier. Last month, NY sugar sank to a 4.25-year nearest-futures low, and London sugar slumped to a 4-year low as they extended their 7-month downtrend due to prospects of abundant global sugar supplies. Higher sugar output in Brazil is bearish for prices. Unica reported last Thursday that Brazil's Center-South sugar output in the first half of September rose by +15.7% y/y to 3.622 MT. Also, the percentage of sugarcane crushed for sugar by Brazil's sugar mills in the second half of August increased to 53.49% from 47.74% the same time last year. However, cumulative 2025-26 Center-South sugar output through mid-September fell -0.1% y/y to 30.388 MMT. The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop. India's Meteorological Department reported last Tuesday that the cumulative monsoon rain in India as of September 30 was 937.2 mm, 8% above normal and the strongest monsoon in 5 years. The outlook for higher sugar production in India is bearish for prices. On June 2, India's National Federation of Cooperative Sugar Factories projected that India's 2025/26 sugar production would climb +19% y/y to 34.9 MMT, citing larger planted cane acreage. That would follow a -17.5% y/y decline in India's sugar production in 2024/25 to a 5-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA). Another bearish factor for sugar was the recent assertion from sugar trader Sucden that India may divert 4 MMT of sugar to make ethanol in 2025/26, which is not enough to ease the country's sugar surplus and may prompt India's sugar mills to export as much as 4 MMT of sugar, above earlier expectations of 2 MMT. India is the world's second-largest producer of sugar. The outlook for higher sugar production in Thailand is bearish for prices after the Thai Sugar Miller Corp projected last Wednesday that Thailand's 2025/26 sugar crop will increase by +5% y/y to 10.5 MMT. On May 2, Thailand's Office of the Cane and Sugar Board reported that Thailand's 2024/25 sugar production rose +14% y/y to 10.00 MMT. Thailand is the world's third-largest sugar producer and the second-largest exporter of sugar.
On August 29, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficits. The ISO projects a global 2025/26 sugar deficit of -231,000 MT, improving from a -4.88 MMT shortfall in 2024/25. The ISO also projects 2025/26 global sugar production will rise by +3.3% y/y to 180.6 MMT, and 2025/26 global sugar consumption will increase +0.3% y/y to 180.8 MMT. Expectations for abundant sugar supplies are bearish for prices. On June 30, commodities trader Czarnikow projected a 7.5 MMT global sugar surplus for the 2025/26 season, the largest surplus in 8 years. On May 22, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% y/y to a record 189.318 MMT, with global sugar ending stocks at 41.188 MMT, up 7.5% y/y. On August 19, Conab, Brazil's government crop forecasting agency, cut its Brazil 2025/26 production estimate by 3.1% to 44.5 MMT from a previous estimate of 45.9 MMT. In July, Conab reported that 2024/25 Brazil sugar production fell by -3.4% y/y to 44.118 MMT, citing lower sugarcane yields due to drought and excessive heat. The USDA, in its bi-annual report released May 22, projected that global 2025/26 sugar production would climb +4.7% 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 forecasted that 2025/26 global sugar ending stocks would climb +7.5% y/y to 41.188 MMT. The USDA's Foreign Agricultural Service (FAS) predicted that Brazil's 2025/26 sugar production would rise +2.3% y/y to a record 44.7 MMT FAS predicted that India's 2025/26 sugar production would rise +25% y/y to 35.3 MMT due to favorable monsoon rains and increased sugar acreage. FAS predicted that Thailand's 2025/26 sugar production will climb +2% y/y to 10.3 MMT.
