Sugar Prices Weighed Down by Abundant Global Supplies

Core Insights - Sugar prices are experiencing a decline, with London sugar reaching a new 4-year low and NY sugar hitting a 4.25-year nearest-futures low due to increased sugar production in Brazil [2][3] - Brazil's Center-South sugar output in the second half of August rose by 18% year-on-year to 3.872 million tons, with the percentage of sugarcane crushed for sugar increasing to 54.20% from 48.78% the previous year [2] - The International Sugar Organization (ISO) forecasts a global sugar deficit for the 2025/26 season, marking the sixth consecutive year of deficits, with a projected deficit of 231,000 tons, an improvement from the previous year's shortfall of 4.88 million tons [4] Production and Supply - Brazil's cumulative sugar output for the 2025-26 season through August fell by 1.9% year-on-year to 26.758 million tons, despite the increase in production in the latter half of August [2] - The USDA projected a record global sugar production of 189.318 million tons for the 2025/26 season, reflecting a 4.7% year-on-year increase, with ending stocks expected to rise by 7.5% year-on-year to 41.188 million tons [5] Export Dynamics - India's sugar mills may export up to 4 million tons of sugar, exceeding earlier expectations of 2 million tons, as the country anticipates a surplus despite plans to divert 4 million tons for ethanol production [3] - Abundant monsoon rains in India, reported at 893.8 mm as of September 22, are expected to contribute to a bumper sugar crop, further influencing export levels and market prices [6]