Stronger Sugar Output in India Knocks Sugar Prices Lower

Core Insights - Sugar prices have retreated, with NY sugar reaching a 5-year nearest-futures low due to increased sugar production forecasts in India and Brazil [2][4][5] Group 1: Sugar Production Estimates - The India Sugar Mill Association (ISMA) raised its 2025/26 sugar production estimate for India to 31 million metric tons (MMT), an increase of 18.8% year-on-year from the previous forecast of 30 MMT [2] - Brazil's crop forecasting agency, Conab, increased its 2025/26 sugar production estimate for Brazil to 45 MMT, up from 44.5 MMT [3] - Datagro projected Brazil's Center-South sugar production for 2026/27 to rise by 3.9% year-on-year to a record 44 MMT [4] Group 2: Sugar Price Trends - The recent month-long selloff in sugar has led to NY sugar prices hitting a 5-year nearest-futures low and London sugar prices reaching a 4.75-year low, primarily due to higher sugar output and expectations of a global sugar surplus [4] - Cumulative sugar output in Brazil's Center-South through mid-October rose by 0.9% year-on-year to 36.016 MMT, with sugar output in the first half of October increasing by 1.3% year-on-year to 2.484 MMT [5] Group 3: Global Sugar Surplus Projections - BMI Group projected a global sugar surplus of 10.5 MMT for 2025/26, while Covrig Analytics estimated a surplus of 4.1 MMT for the same period [4] - The outlook for higher sugar exports from India is expected to negatively impact sugar prices, as abundant monsoon rains have led to a potential bumper crop [6]