Ample Global Sugar Supplies Weigh on Prices

Core Viewpoint - Sugar prices are experiencing a decline due to concerns over global surpluses, with significant drops in both New York and London markets, reaching multi-year lows [2][3]. Price Trends - March NY world sugar 11 closed down -0.23 (-1.60%) and March London ICE white sugar 5 closed down -7.30 (-1.80%) [1]. - London sugar has fallen to a 5-year nearest-futures low, while NY sugar reached a 3-month low [2]. Global Sugar Surplus Outlook - Analysts predict a global sugar surplus of 3.4 million metric tons (MMT) for the 2026/27 crop year, following an 8.3 MMT surplus in 2025/26 [3]. - Green Pool Commodity Specialists estimate a 2.74 MMT global sugar surplus for 2025/26 and a 156,000 metric ton surplus for 2026/27 [3]. - StoneX anticipates a global sugar surplus of 2.9 MMT in 2025/26 [3]. - Covrig Analytics has raised its 2025/26 global sugar surplus estimate to 4.7 MMT, projecting a decrease to 1.4 MMT for 2026/27 due to weak prices discouraging production [6]. Regional Production Insights - Brazil's cumulative sugar output for the 2025-26 season increased by +0.9% year-on-year to 40.236 MMT, with the ratio of cane crushed for sugar rising to 50.78% from 48.15% [2]. - India's sugar output from October 1 to January 15 is up +22% year-on-year to 15.9 MMT, with the total production estimate for 2025/26 raised to 31 MMT, reflecting an increase of +18.8% year-on-year [4]. Export Dynamics - India may permit additional sugar exports to alleviate domestic supply gluts, with a previous allowance of 1.5 MMT for the 2025/26 season [5]. - The reduction in sugar used for ethanol production in India may facilitate increased sugar exports [4][5].