Sugar Prices Pressured as India Boosts Sugar Production and Crude Oil Declines

Core Viewpoint - Sugar prices are declining due to increased production in India and Brazil, alongside falling crude oil prices, which may lead to a shift in production focus from ethanol to sugar [1][2][3][4][5] Group 1: Indian Sugar Production - Indian sugar production from October 1 to December 15 increased by 28% year-on-year to 7.8 million metric tons (MMT) [1] - The India Sugar Mill Association (ISMA) raised its 2025/26 sugar production estimate to 31 MMT, an increase of 18.8% year-on-year [5] - ISMA reduced its estimate for sugar used for ethanol production in India to 3.4 MMT from a previous forecast of 5 MMT, potentially allowing for increased sugar exports [5] Group 2: Brazilian Sugar Production - Brazil's crop forecasting agency, Conab, raised its 2025/26 sugar production estimate to 45 MMT from 44.5 MMT [3] - Brazil's Center-South sugar output in the first half of November rose by 8.7% year-on-year to 983 thousand metric tons (MT) [3] - Cumulative 2025-26 Center-South sugar output through mid-November increased by 2.1% year-on-year to 39.179 MMT [3] Group 3: Global Sugar Market Outlook - The International Sugar Organization (ISO) forecasts a sugar surplus of 1.625 million MT for 2025-26, driven by increased production in India, Thailand, and Pakistan [4] - ISO predicts a 3.2% year-on-year rise in global sugar production to 181.8 million MT in 2025-26 [4] - Sugar trader Czarnikow increased its global 2025/26 sugar surplus estimate to 8.7 MMT, up by 1.2 MMT from a previous estimate [4]