March NY world sugar #11 (SBH26) today is up +0.01 (+0.07%), and March London ICE white sugar #5 (SWH26) is up +8.90 (+2.37%).
Sugar prices are moving higher today on some technical short-covering after the recent selloff pushed them into oversold territory.
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On Thursday, sugar prices extended their 5-month-long plunge and posted 5.25-year nearest-futures lows. Concerns that a global sugar surplus will persist are hammering prices. Last Wednesday, analysts from sugar trader Czarnikow said they expect a global sugar surplus of 3.4 MMT in the 2026/27 crop year, following an 8.3 MMT surplus in 2025/26. Also, Green Pool Commodity Specialists said on January 29 that they expect a 2.74 MMT global sugar surplus for 2025/26 and a 156,000 MT surplus for 2026/27. Also, StoneX said last Friday it expects a global sugar surplus of 2.9 MMT in 2025/26.
Last Friday, Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through mid-January rose by +0.9% y/y to 40.236 MMT. Also, the ratio of cane crushed for sugar rose to 50.78% in 2025/36 from 48.15% in 2024/25.
The India Sugar Mill Association (ISMA) reported January 19 that India’s 2025-26 sugar output from Oct 1-Jan 15 is up +22% y/y to 15.9 MMT. The 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, as India experienced its strongest monsoon season in five years. 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. India is the world’s second-largest sugar producer.
Sugar prices have been undercut amid prospects of higher Indian sugar exports. On Friday, India’s government allowed an additional 500,000 MT of sugar for export for the 2025/26 season, on top of 1.5 MMT allowed in November. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.
Covrig Analytics on December 12 raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT in October. However, Covrig projects that the 2026/27 global sugar surplus will fall to 1.4 MMT, as weak prices discourage production.
The outlook for record sugar output in Brazil is 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 prior forecast of 44.5 MMT.
An excessively short position in sugar futures by funds could add fuel to a short-covering rally. Last Friday’s weekly Commitment of Traders (COT) report showed funds boosted their short positions in NY world sugar futures and options by 57,104 in the week ended February 3 to a record 239,232 net short positions (data from 2006).
The outlook for smaller future sugar supplies from Brazil is a supportive factor for prices. Consulting firm Safras & Mercado said on December 23 that Brazil’s sugar production in 2026/27 will fall by -3.91% to 41.8 MMT from 43.5 MMT expected in 2025/26. The firm expects Brazil’s sugar exports in 2026/27 to fall by -11% y/y to 30 MMT.
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. 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.
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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