The Outlook for Abundant Global Supplies Weighs on Sugar Prices

Core Insights - Sugar prices are experiencing downward pressure, with NY sugar reaching a one-week low and London sugar hitting a four-year low due to a projected global sugar surplus of 4.1 million metric tons (MMT) for the 2025/26 season [1] Group 1: Market Trends - Over the past seven months, sugar prices have declined, with NY sugar hitting a 4.5-year low last month, attributed to increased sugar output in Brazil [2] - Brazil's Center-South sugar output in the first half of September rose by 15.7% year-on-year to 3.622 million tons (MT), while the percentage of sugarcane crushed for sugar increased to 53.49% from 47.74% year-on-year [2] - Cumulative sugar output in Brazil's Center-South for the 2025-26 season through mid-September fell by 0.1% year-on-year to 30.388 MMT [2] Group 2: Regional Production Outlook - India's sugar production is expected to rise by 19% year-on-year to 34.9 MMT for the 2025/26 season, following a significant decline of 17.5% year-on-year to a five-year low of 26.2 MMT in 2024/25 [3] - The Indian Meteorological Department reported cumulative monsoon rainfall of 937.2 mm as of September 30, which is 8% above normal and the strongest in five years, potentially leading to a bumper sugar crop [3] - India's sugar mills may export as much as 4 MMT of sugar, exceeding earlier expectations of 2 MMT, as the country may divert 4 MMT of sugar for ethanol production [4] Group 3: Other Major Producers - Thailand's sugar production is projected to increase by 5% year-on-year to 10.5 MMT for the 2025/26 season, following a 14% year-on-year rise to 10.00 MMT in 2024/25 [5] - Thailand is the world's third-largest sugar producer and the second-largest exporter of sugar, contributing to bearish market sentiment [5]