Sugar Prices Sharply Lower as India Ramps Up Sugar Production

Core Insights - Sugar prices have recently declined sharply due to increased production in India, with a reported 50% year-on-year increase in sugar production from October to November, reaching 4.1 million metric tons (MMT) [2] - Brazil's sugar production outlook is also bearish, with the country's crop forecasting agency raising its 2025/26 sugar production estimate to 45 MMT, contributing to downward pressure on prices [3] - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million metric tons for the 2025-26 marketing year, driven by increased production in India, Thailand, and Pakistan [6] Production and Supply Dynamics - Indian sugar production has surged, with 424 sugar mills crushing cane as of November 30, up from 382 the previous year, and cumulative cane crushed reaching 46.8 MMT, an increase from 33.4 MMT year-on-year [2] - Brazil's Center-South sugar output in the first half of November rose by 8.7% year-on-year to 983 thousand metric tons, with cumulative output through mid-November increasing by 2.1% year-on-year to 39.179 MMT [3] Market Reactions and Future Outlook - Sugar prices rallied to six-week highs last Friday due to concerns about tighter global supplies, although recent adjustments in Brazil's production estimates have contributed to bearish sentiment [4] - India's food ministry's decision to allow mills to export 1.5 MMT of sugar in the 2025/26 season, down from earlier estimates, is expected to support sugar prices [5] - The ISO's forecast of a 3.2% year-on-year rise in global sugar production to 181.8 million metric tons in 2025-26 indicates a significant shift in market dynamics [6]