July NY world sugar #11 closed at $14.68, down 1.87% on Wednesday, while August London ICE white sugar #5 remained unchanged. This decline is attributed to a more than 5% drop in crude oil prices, potentially prompting global sugar mills to increase sugar production in response to lower ethanol prices.
The International Sugar Organization (ISO) forecasts a record global sugar production of 182 million metric tons (MMT) for the 2025/26 season, marking a 3.5% year-over-year increase, with a projected surplus of 2.2 MMT. In contrast, anticipated declines in production for the following season, 2026/27, are largely due to concerns over adverse weather patterns, including the potential impact of El Niño, which is expected to reduce global sugar production to 180 MMT, resulting in a shortage of 262,000 metric tons.
Market dynamics are further complicated by India’s ongoing ban on sugar exports through September 30, which aims to secure local supplies amid rising global demand. Additionally, the closure of the Strait of Hormuz has disrupted about 6% of the global sugar trade, compounding supply concerns.
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