Global Sugar Market Slumps as Surplus Outlook
Sugar prices plunged Wednesday, with July NY world sugar #11 (SBN25) closing down -1.86% and August London white sugar #5 (SWQ25) falling -2.32%. NY sugar hit a 3-3/4 year low, while London sugar touched a 4-1/4 month low. A sharp shift in global sugar market supply expectations continues to weigh heavily on prices.
USDA Forecast Fuels Bearish Momentum
Last Thursday, the USDA‘s biannual report projected global 2025/26 sugar production to jump +4.7% y/y to a record 189.318 million metric tons (MMT). The USDA also forecasted a significant rise in global ending stocks to 41.188 MMT, a +7.5% increase y/y, reinforcing concerns of oversupply.
Production Gains in Key Countries
Brazil’s sugar production for 2025/26 is forecasted to reach a record 44.7 MMT, up +2.3% y/y. India is expected to post a dramatic +25% increase to 35.3 MMT, driven by favorable monsoon rains and expanded acreage. Thailand, too, is projected to increase output +2% y/y to 10.3 MMT.
Weather, Monsoon, and Policy Signals from India
The Indian government anticipates a bumper crop this year due to above-normal rainfall during the June–September monsoon, forecasted at 105% of the long-term average. While India previously restricted exports to secure domestic supply, the government announced it would allow 1 MMT of sugar exports this season.
However, the ISMA has forecasted a sharp -17.5% y/y drop in India’s 2024/25 sugar production to a 5-year low of 26.2 MMT.
India’s Food Secretary recently stated that exports may total only 800,000 MT, lower than previous expectations. From October 1 to May 15, India produced 25.74 MMT of sugar, down -17% from last year.
Thailand Reports Record Production
Thailand’s 2024/25 sugar production rose +14% y/y to 10.00 MMT, according to the Office of the Cane and Sugar Board. As the world’s third-largest sugar producer and second-largest exporter, Thailand’s output adds further weight to global oversupply concerns.
Offsetting Factors Support Price Floor
Despite bearish trends, there are emerging signs of tighter supply. Brazil’s April Center-South sugar production dropped -38.6% y/y to 1.58 MMT. Through March, cumulative output had already fallen -5.3% y/y to 40.169 MMT. Fires in São Paulo, triggered by last year’s drought and excessive heat, may have destroyed as much as 5 MMT of sugarcane.
Brazil’s crop forecasting agency, Conab, expects 2024/25 sugar production to decline -3.4% y/y to 44.118 MMT. In India, lower cane yields forced a production downgrade to 26.4 MMT from the earlier 27.27 MMT forecast.
ISO Revises Deficit Forecast
The International Sugar Organization (ISO) on May 15 raised its 2024/25 global sugar deficit forecast to -5.47 MMT, up from a February estimate of -4.88 MMT. The ISO also reduced its production forecast to 174.8 MMT, reflecting tightening supply despite record demand.
Strong Demand Continues
The USDA projects global human sugar consumption to reach a record 177.921 MMT in 2025/26, up +1.4% y/y. This underscores strong demand even as supply conditions fluctuate globally.
While short-term pricing remains pressured by the anticipated surplus, underlying risks tied to weather, crop volatility, and shifting export policies continue to offer potential support. Traders are watching global developments closely to assess whether bearish supply trends will persist—or reverse.
