Slump in Crude Oil Weighs on Sugar Prices

Price Movements - March NY world sugar 11 closed down -0.13 (-0.87%) and March London ICE white sugar 5 closed down -3.40 (-0.80%) on Tuesday [1] - Sugar prices retreated due to a slump in crude oil prices, with WTI crude sinking to a 4.75-year low, potentially prompting sugar mills to increase sugar production over ethanol [1] Production Estimates - Indian sugar production from October 1 to December 15 increased by +28% year-on-year to 7.8 million metric tons (MMT) according to the India Sugar Mill Association (ISMA) [2] - Brazil's sugar production estimate for 2025/26 was raised to 45 MMT from 44.5 MMT by Conab, with cumulative sugar output through November rising by +1.1% year-on-year to 39.904 MMT [3] - The amount of cane crushed for sugar in Brazil increased to 51.12% in 2025/26 from 48.34% in 2024/25 [3] Global Sugar Surplus - The International Sugar Organization (ISO) forecasted a sugar surplus of 1.625 million MT for 2025-26, driven by increased production in India, Thailand, and Pakistan, reversing a previous deficit forecast [4] - ISO projected a +3.2% year-on-year rise in global sugar production to 181.8 million MT for 2025-26 [4] - Czarnikow raised its global sugar surplus estimate for 2025/26 to 8.7 MMT, an increase of +1.2 MMT from a previous estimate [4] Indian Sugar Production Impact - ISMA raised its 2025/26 India sugar production estimate to 31 MMT from 30 MMT, reflecting an increase of +18.8% year-on-year [5] - The estimate for sugar used for ethanol production in India was cut to 3.4 MMT from a previous forecast of 5 MMT, potentially allowing for increased sugar exports [5]