Sugar Prices Fall on the Outlook for a Global Surplus

Core Insights - Sugar prices are declining due to expectations of a global surplus, overshadowing geopolitical risks related to shipping costs from the Iran conflict [1] Group 1: Global Sugar Surplus Forecasts - Analysts from Czarnikow project 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 [2] - Green Pool Commodity Specialists expect a 2.74 MMT surplus for 2025/26 and a 156,000 MT surplus for 2026/27 [2] - StoneX forecasts a 2.9 MMT global sugar surplus in 2025/26 [2] - The International Sugar Organization (ISO) revised its forecast for a +1.22 MMT surplus in 2025-26, down from +1.63 MMT, following a -3.46 MMT deficit in 2024-25 [2] Group 2: Sugar Production Trends - ISO anticipates a +3.0% year-on-year increase in global sugar production to 181.3 million MMT in 2025-26, driven by higher production in India, Thailand, and Pakistan [2] - Brazil's sugar production in the second half of January fell by -36% year-on-year to 5,000 MT, although cumulative output through January is up +0.9% year-on-year to 40.24 MMT [2] - Safras & Mercado predicts Brazil's sugar production will decrease by -3.91% to 41.8 MMT in 2026/27 from 43.5 MMT expected in 2025/26 [3] Group 3: India's Sugar Production - The Indian Sugar and Bio-energy Manufacturers Association (ISMA) reported a +12% year-on-year increase in India's sugar output to 24.75 MMT for the period from October 1 to February 28 [4] - ISMA projects India's total sugar production for 2025/26 at 29.3 MMT, which is a 12% increase year-on-year, but lower than the previous estimate of 30.95 MMT [4] - The estimate for sugar used for ethanol production in India has been reduced to 3.4 MMT from an earlier forecast of 5 MMT, potentially allowing for increased sugar exports [4]