Sugar Prices Undercut by the Outlook for a Global Surplus

Core Insights - Sugar prices are experiencing mixed trends, with a forecasted surplus in 2025-26 impacting market dynamics [2][5] - Increased sugar production in key countries like India, Thailand, and Pakistan is driving the surplus [2] - Short covering in the market is observed due to potential changes in India's ethanol pricing policy [3] Price Movements - March NY world sugar 11 is down by 0.07 (-0.47%), while March London ICE white sugar 5 is up by 2.10 (+0.50%) [1] - Sugar prices rallied to three-week highs due to tighter supplies from India, with export quotas being reduced [4] Supply Forecasts - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for 2025-26, reversing a previous deficit [2] - Global sugar production is expected to rise by 3.2% year-on-year to 181.8 million MT in 2025-26 [2] Regional Production Insights - Brazil's sugar production forecast for 2025-26 has been raised to 45 million MT, contributing to bearish price outlooks [6] - Brazil's Center-South sugar output increased by 16.4% year-on-year in the second half of October [6] Market Sentiment - The outlook for robust global sugar supplies has negatively impacted sugar prices, with significant lows recorded recently [5] - Sugar trader Czarnikow has increased its global sugar surplus estimate for 2025-26 to 8.7 million MT [5]