Sugar Prices Slip as the Dollar Strengthens

Core Insights - Sugar prices are currently under pressure due to a stronger dollar, with March NY world sugar 11 down by 0.05 (-0.33%) and March London ICE white sugar 5 down by 1.20 (-0.28%) [1] - Despite the pressure, losses in sugar prices are limited by expectations of index-related buying, with Citigroup projecting inflows of $1.2 billion in sugar futures contracts for the annual rebalancing of commodity indexes [2] Supply Dynamics - Recent reports indicate that Brazil's sugar production is expected to decline by 3.91% in 2026/27, falling to 41.8 million metric tons (MMT) from 43.5 MMT in 2025/26, with exports anticipated to drop by 11% year-on-year to 30 MMT [3] - In contrast, Indian sugar production for the 2025-26 season has surged by 25% year-on-year to 11.90 MMT, prompting the Indian Sugar Mill Association to raise its production estimate for the same season to 31 MMT, an increase of 18.8% year-on-year [4] - The Indian government is considering allowing additional sugar exports to alleviate a domestic supply glut, with a quota of 1.5 MMT set for the 2025/26 season [5] Market Outlook - The outlook for sugar prices remains bearish due to expectations of record sugar output in Brazil, with Conab raising its production estimate for 2025/26 to 45 MMT from 44.5 MMT, and cumulative sugar output in Brazil's Center-South region increasing by 1.1% year-on-year to 39.904 MMT [6]