On October 4, 2023, sugar prices plunged sharply, with New York’s October sugar #11 (SBV25) down 3.77% to a new contract low, and London’s ICE white sugar #5 (SWQ25) declining 2.45%. The downturn is attributed to weak demand and expectations of increased global sugar supplies, with a record low amount of 45,000 MT of NY sugar delivered for the July contract expiring on October 2—the lowest in 11 years.
According to commodities trader Czarnikow, a global sugar surplus of 7.5 million metric tons is projected for the 2025/26 season, the largest surplus in eight years. The USDA also anticipates a 4.7% year-over-year increase in global sugar production to a record 189.31 million metric tons, alongside a rise in global ending stocks by 7.5% to 41.19 million metric tons. In India, the 2025/26 sugar production is expected to surge by 19% year-over-year to 35 million metric tons, potentially amplifying bearish market conditions.
The USDA’s Foreign Agricultural Service expects Brazil’s sugar output to rise 2.3% year-over-year to a record 44.7 million metric tons, while Thailand’s production is anticipated to climb 2% to 10.3 million metric tons. Meanwhile, Brazil continues to face reduced production due to drought, with output down 14.6% year-over-year through mid-June, while the International Sugar Organization has raised its 2024/25 global sugar deficit forecast to a nine-year high of -5.47 million metric tons.
