Global Sugar Prices Rise Amid Production Changes and Market Forecasts
March NY world sugar #11 (SBH25) today is up +0.40 (+2.05%), and March London ICE white sugar #5 (SWH25) is up +12.10 (+2.33%).
Sugar prices are up today due to adjustments in forecasts regarding global production. Covrig Analytics has lowered its 2025/26 global sugar surplus estimate to 4.1 MMT from an earlier figure of 5.2 MMT. Additionally, Alvean, a top sugar trader, anticipates that Brazil will crush 604 MMT of sugarcane during the 2025/26 season, reflecting a 1.6% decrease from last year.
Recent weeks have seen the Brazilian real (^USDBRL) strengthen, prompting fund short-covering in sugar markets. As a result, sugar prices hit a 7-week high last Thursday. On Friday, the real reached a 2-3/4 month high, making it less attractive for Brazil’s sugar producers to sell exports.
Last Tuesday, Centrum provided more supportive news by reporting that India’s 2024/25 sugar production—from October 1 to January 31—has decreased by 12.2% year-over-year to 16.5 MMT. However, an opposing forecast from Green Pool Commodity Specialists suggests the global sugar market could enter a surplus of 2.7 MMT in the 2025/26 crop year, a shift from the estimated deficit of 3.7 MMT for 2024/25.
Notably, sugar prices have faced pressure over the last four months. In January, NY sugar dipped to its lowest level in 5-3/4 months, while London sugar fell to a 3-1/2 year low. The growing global sugar supply outlook continues to impact market prices. On January 20, the Indian government announced the approval of 1 MMT of sugar for export this season, easing previously imposed restrictions. In 2023, India limited sugar exports to ensure sufficient domestic supply, which resulted in only 6.1 MMT being exported during the 2022/23 season; this was significantly lower compared to a record 11.1 MMT in the 2021/22 season.
On November 21, the International Sugar Organization (ISO) revised its 2024/25 global sugar deficit forecast to -2.51 MMT, improving from an earlier prediction of -3.58 MMT. Additionally, ISO adjusted its 2023/24 global sugar surplus estimate to 1.31 MMT, up from 200,000 MT projected in August.
Looking forward, the prospect of increased sugar production in Thailand appears bearish for sugar prices. Thailand’s Office of the Cane and Sugar Board announced an expected 18% year-on-year increase in 2024/25 sugar production to 10.35 MMT, following the 2023/24 season’s production of 8.77 MMT. As the third-largest sugar producer in the world, Thailand plays a significant role in global exports.
Sugar prices have found some support recently, however, after Czarnikow adjusted its Thailand 2024/25 production estimate downward to 10.8 MMT from a prior forecast of 11.6 MMT.
Challenges persist in Brazil, where drought conditions and extreme heat have led to crop damage and fires in São Paulo, the country’s top sugar-producing region. The industry group Orplana reported that approximately 2,000 fire outbreaks have impacted around 80,000 hectares of sugarcane. Green Pool estimated that these conditions may have resulted in a loss of up to 5 MMT of sugarcane. Following this, Conab, Brazil’s crop forecasting agency, revised the 2024/25 production estimate on November 21 down to 44 MMT from 46 MMT due to poor yields attributed to the weather. Unica’s recent report indicates a 5.5% decrease year-over-year in cumulative Center-South sugar output for 2024/25, totaling 39.794 MMT as of mid-January.
Support for sugar prices continues from projections of lower production levels in India, the world’s second-largest producer. The India Sugar Mills Association (ISMA) forecasts that India’s 2024/25 sugar production could drop by 15% year-over-year to a five-year low of 27.27 MMT.
Additionally, on August 30, ISO predicted that 2024/25 global sugar production would decline by 1.1% year-over-year to 179.3 MMT, down from 181.3 MMT in 2023/24.
The USDA’s bi-annual report, released on November 21, projected a 1.5% year-over-year increase in global 2024/25 sugar production to a record 186.619 MMT. Human sugar consumption is expected to rise by 1.2% year-over-year to a record 179.63 MMT, while global sugar ending stocks are forecasted to fall by 6.1% year-over-year to 45.427 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 are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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