Expectations of Ample Supplies Weigh on Sugar Prices

Core Insights - Sugar prices are declining due to expectations of abundant global supplies, with NY sugar reaching a 4.25-year low and London sugar a 4-year low, continuing a 7-month downtrend [2] Supply and Production - Brazil's sugar output increased by +18% year-on-year in the second half of August, reaching 3.872 million tons, with the percentage of sugarcane crushed for sugar rising to 54.20% from 48.78% the previous year [3] - Cumulative sugar output in Brazil's Center-South region for 2025-26 through August fell by -1.9% year-on-year to 26.758 million tons [3] - The USDA projected a record global sugar production of 189.318 million tons for 2025/26, an increase of +4.7% year-on-year, with ending stocks at 41.188 million tons, up 7.5% year-on-year [6] Global Sugar Surplus and Deficit Projections - StoneX projected a global sugar surplus of +2.8 million tons for the 2025/26 season, a shift from a deficit of -4.7 million tons in 2024/25 [2] - The International Sugar Organization (ISO) forecasted a global sugar deficit of -231,000 tons for the 2025/26 season, improving from a -4.88 million ton shortfall in 2024/25 [5] - Czarnikow projected a 7.5 million ton global sugar surplus for the 2025/26 season, the largest in 8 years [6] Impact of India’s Sugar Production - India may divert 4 million tons of sugar for ethanol production in 2025/26, which may not alleviate the country's sugar surplus and could lead to exports of up to 4 million tons, exceeding earlier expectations of 2 million tons [4]