As of today, July NY world sugar #11 (SBN25) has decreased by ﹣0.15 (-0.90%), reaching a nearly 4-year low, while August London ICE white sugar #5 (SWQ25) is down ﹣3.00 (-0.64%). This decline extends a two-month-long selloff, driven by expectations of a global sugar surplus. The USDA’s latest report estimates that global sugar production for the 2025/26 season will rise by 4.7% year-over-year to a record 189.318 million metric tons (MMT), resulting in a surplus of 41.188 MMT, which is an increase of 7.5% year-over-year.
In India, the world’s second-largest producer, sugar production is projected to increase by 19% year-over-year to 35 MMT for the 2025/26 season, aided by larger cane acreage and favorable monsoon conditions. Conversely, Brazil’s production for the same period is expected to rise by 2.3% year-over-year to 44.7 MMT. Meanwhile, the Indian government has allowed sugar mills to export 1 MMT this season, assigning a bearish outlook given the high domestic supplies.
Concerns for production in Brazil stem from drought and heat that damaged sugar crops, with predictions for a fall of 3.4% year-over-year in 2024/25 sugar production. The International Sugar Organization has revised its 2024/25 global sugar deficit forecast to a 9-year high of -5.47 MMT, indicating tighter market conditions as comparison to the previous year’s surplus of 1.31 MMT.
