The Outlook for Global Sugar Surpluses Weighs on Prices

Core Viewpoint - Sugar prices are declining due to expectations of global surpluses and increased production, with New York sugar reaching a 1.5-week low and London sugar hitting a 2.5-month low [1] Group 1: Global Sugar Production and Surplus - Green Pool Commodity Specialists project a global sugar surplus of 2.74 million metric tons (MMT) for 2025/26 and 156,000 metric tons for 2026/27 [1] - Covrig Analytics has raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT in October, but expects the surplus to decrease to 1.4 MMT in 2026/27 due to weak prices discouraging production [5] - Conab, Brazil's crop forecasting agency, increased its sugar production estimate for Brazil in 2025/26 to 45 MMT from 44.5 MMT [6] Group 2: Regional Sugar Production Updates - Brazil's cumulative sugar output for the 2025-26 season through December increased by 0.9% year-on-year to 40.222 MMT, with the ratio of cane crushed for sugar rising to 50.82% in 2025/26 from 48.16% in 2024/25 [2] - India's sugar output from October 1 to January 15 for the 2025-26 season is up 22% year-on-year to 15.9 MMT, with the overall production estimate raised to 31 MMT, an 18.8% increase year-on-year [3] Group 3: Export Policies and Market Impact - India's government may allow additional sugar exports to alleviate a domestic supply glut, with a quota of 1.5 MMT for the 2025/26 season already announced [4] - The reduction in sugar used for ethanol production in India from 5 MMT to 3.4 MMT may facilitate an increase in sugar exports [3]