Sugar Prices Tumble as India Ramps Up Sugar Production

Core Insights - Sugar prices are experiencing a decline due to increased production in India, with a reported 50% year-on-year rise in sugar production from October to November, reaching 4.1 million metric tons (MMT) [2] - Brazil's sugar production outlook is also bearish, with an increase in estimates for the 2025/26 season to 45 MMT, contributing to downward pressure on prices [3] - Recent developments indicate a potential shift in India's sugar production focus towards ethanol, which could further impact sugar supply dynamics [4] Group 1: Production and Supply Dynamics - India's sugar production has surged, with 424 mills crushing cane as of November 30, resulting in 46.8 MMT crushed, up from 33.4 MMT a year ago [2] - Brazil's Center-South sugar output increased by 8.7% year-on-year in early November, totaling 983 MT, with cumulative output for the 2025-26 season reaching 39.179 MMT, up 2.1% year-on-year [3] - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for the 2025-26 season, driven by increased production in India, Thailand, and Pakistan [6] Group 2: Market Reactions and Price Influences - Sugar prices rallied to six-week highs recently due to concerns over tighter global supplies, although this was followed by a downward trend as production estimates were revised upwards [4] - India's food ministry's decision to allow mills to export 1.5 MMT of sugar in the 2025/26 season, lower than previous estimates, provides some support to sugar prices [5] - The potential increase in ethanol prices in India could incentivize mills to prioritize ethanol production over sugar, potentially reducing sugar supplies [4]