Sugar Prices Slip on the Outlook for Global Surpluses

Core Viewpoint - Sugar prices are declining due to expectations of global surpluses and increased production, with specific forecasts indicating significant surpluses for the upcoming years [1][5]. Group 1: Global Sugar Production and Surplus - Green Pool Commodity Specialists project a global sugar surplus of 2.74 million metric tons (MMT) for the 2025/26 season and a surplus of 156,000 metric tons for 2026/27 [1]. - Covrig Analytics has raised its estimate for the 2025/26 global sugar surplus to 4.7 MMT from 4.1 MMT, but anticipates a decrease to 1.4 MMT for 2026/27 due to weak prices discouraging production [5]. - Brazil's Conab has increased its sugar production estimate for 2025/26 to 45 MMT from 44.5 MMT, contributing to the bearish outlook for prices [6]. Group 2: Regional Sugar Production Updates - Brazil's cumulative sugar output for the 2025-26 season through December has risen by 0.9% year-on-year to 40.222 MMT, with the ratio of cane crushed for sugar increasing to 50.82% from 48.16% [2]. - India's sugar output from October 1 to January 15 for the 2025-26 season is reported to be up 22% year-on-year to 15.9 MMT, with the overall production estimate raised to 31 MMT, an increase of 18.8% year-on-year [3]. Group 3: Export Policies and Market Impact - India's government may permit additional sugar exports to alleviate a domestic supply glut, with a quota allowing mills to export 1.5 MMT in the 2025/26 season [4]. - The reduction in the estimate for sugar used for ethanol production in India from 5 MMT to 3.4 MMT may enhance the country's capacity to boost sugar exports [3].