Sugar Prices Fall on the Outlook for a Global Sugar Surplus

Core Viewpoint - Sugar prices have declined due to a forecasted surplus in global sugar production for the 2025-26 crop year, driven by increased output in key producing countries like India, Thailand, and Pakistan [2]. Group 1: Sugar Price Movements - On May 26, NY world sugar 11 closed down by 0.06 (-0.43%), while May London ICE white sugar 5 closed down by 0.20 (-0.05%) [1]. - Sugar prices fell after the International Sugar Organization (ISO) revised its surplus forecast for 2025-26 to +1.22 million metric tons (MMT), down from +1.63 MMT [2]. Group 2: Production Forecasts - ISO anticipates a +3.0% year-over-year increase in global sugar production, reaching 181.3 million MMT in 2025-26 [2]. - Brazil's sugar production in the 2025-26 crop year is projected to increase by +0.9% year-over-year to 40.24 MMT, despite a reported 36% year-over-year decline in production during the second half of January [4]. - India's sugar production for 2025-26 is projected at 29.3 MMT, reflecting a 12% year-over-year increase, although this is below an earlier estimate of 30.95 MMT [7]. Group 3: Market Dynamics - A significant short position in NY sugar futures could lead to a short-covering rally, as funds increased their short positions to a record high of 265,324 net short positions [5]. - Brazil's sugar exports are expected to decline by -11% year-over-year to 30 MMT in the 2026-27 crop year [6].