Higher Sugar Output in Brazil Undercuts Prices

Price Movements - March NY world sugar 11 is down -0.02 (-0.13%) while March London ICE white sugar 5 is up +2.00 (+0.47%) indicating mixed sugar prices today [1] Production and Supply - Brazil's cumulative 2025-26 Center-South sugar output through mid-December increased by +0.9% year-on-year to 40.158 million metric tons (MMT) with the ratio of cane crushed for sugar rising to 50.91% in 2025/26 from 48.19% in 2024/25 [1] - Covrig Analytics raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT in October, but projected a decrease in the 2026/27 global sugar surplus to 1.4 MMT due to weak prices discouraging production [2] - Consulting firm Safras & Mercado forecasts Brazil's sugar production in 2026/27 to decline by -3.91% to 41.8 MMT from 43.5 MMT expected in 2025/26, with exports expected to fall by -11% year-on-year to 30 MMT [4] - Indian sugar production for 2025-26 surged 25% year-on-year to 11.90 MMT, with the Indian Sugar Mill Association (ISMA) raising its production estimate to 31 MMT, up +18.8% year-on-year [5] Export Dynamics - India's food secretary indicated that the government may allow additional sugar exports to alleviate a domestic supply glut, with a quota system for sugar exports introduced in 2022/23 [6] - In November, India's food ministry announced it would permit mills to export 1.5 MMT of sugar in the 2025/26 season [6] Market Influences - Expectations of index-related buying of sugar futures for the annual rebalancing of commodity indexes are supportive for prices, with Citigroup projecting inflows of $1.2 billion in sugar futures contracts this week [3]