Global sugar prices slipped on Tuesday, with London futures falling to a five-year low for the nearest contract. The decline continues a trend seen over the past three months, during which New York sugar hit a three-month low last Friday while London prices extended losses amid ongoing concerns about excess global supplies, TradingView reported.
Data from Brazilian industry group Unica showed that cumulative sugar production in the Center-South region for the 2025–26 season reached 40.236 million metric tons (MMT) through mid-January, marking a 0.9% increase from a year earlier. The share of sugarcane directed toward sugar production also rose to 50.78%, compared with 48.15% in the previous season.
Expectations of a sustained global sugar surplus continue to pressure the market. Analysts at sugar trader Czarnikow said last week they anticipate a surplus of 3.4 MMT in the 2026–27 crop year, following an estimated 8.3 MMT surplus in 2025–26.
Green Pool Commodity Specialists on January 29 projected a 2.74 MMT surplus for 2025–26 and a smaller 156,000 metric ton surplus the following year, while StoneX forecast a 2.9 MMT surplus for 2025–26.
India’s rising output is also contributing to the supply outlook. The India Sugar Mill Association (ISMA) on January 18 reported that production between October 1 and January 15 climbed 22% year-on-year to 15.9 MMT. ISMA later increased its full-season production estimate to 31 MMT from 30 MMT, representing an 18.8% annual gain. At the same time, the association reduced its projection for sugar diverted to ethanol production to 3.4 MMT from an earlier estimate of 5 MMT, a move that could free up more sugar for exports. India is the world’s second-largest sugar producer.
Prices have also been affected by the possibility of increased shipments from India after the country’s food secretary indicated that additional exports may be allowed to ease domestic oversupply. The food ministry had already approved exports of 1.5 MMT for the 2025–26 season. India introduced export quotas in 2022–23 after late rains reduced production and tightened domestic availability.
Covrig Analytics on December 12 raised its estimate for the 2025–26 global surplus to 4.7 MMT from 4.1 MMT in October but expects the surplus to narrow to 1.4 MMT in 2026–27 as weaker prices discourage production.
Prospects of record output in Brazil have further weighed on the market. The country’s crop agency Conab increased its production forecast for 2025–26 to 45 MMT from 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 that funds expanded their net short positions in New York sugar futures and options by 57,104 contracts in the week ended February 3, bringing total net shorts to a record 239,232 contracts based on data going back to 2006. Heavy short positions sometimes trigger rallies when traders move to cover their bets.
Looking ahead, consulting firm Safras & Mercado said Brazil’s sugar production is expected to fall by 3.91% to 41.8 MMT in 2026–27 from 43.5 MMT projected for 2025–26. Brazilian sugar exports are also seen declining 11% year-on-year to 30 MMT, offering some support to prices.
The International Sugar Organization (ISO) on November 17 projected a global surplus of 1.625 million metric tons for 2025–26, following a 2.916 million metric ton deficit in 2024–25. The group attributed the shift to higher production in India, Thailand, and Pakistan and forecast global output to rise 3.2% to 181.8 million metric tons.
Czarnikow on November 5 boosted its estimate for the 2025–26 surplus to 8.7 MMT, up from 7.5 MMT in September.
Thailand is also expected to boost supply. The Thai Sugar Millers Corp on October 1 projected the country’s 2025–26 crop at 10.5 MMT, a 5% increase from the previous year. Thailand ranks as the world’s third-largest producer and second-largest exporter.
In its biannual report released on December 16, the U.S. Department of Agriculture projected global sugar production for 2025–26 to climb 4.6% year-on-year to a record 189.318 MMT, while human consumption is expected to grow 1.4% to 177.921 MMT. Ending stocks are forecast to decline 2.9% to 41.188 MMT.
The USDA’s Foreign Agricultural Service (FAS) also predicted that Brazil’s production would rise 2.3% to a record 44.7 MMT, while India’s output could jump 25% to 35.25 MMT due to favorable monsoon conditions and expanded acreage. Thailand’s production is expected to edge up 2% to 10.25 MMT.
