Sugar futures slipped on Thursday, continuing the downward trend seen earlier in the week. March New York raw sugar futures (SBH26) fell by 0.03, while March London white sugar futures (SWH26) declined by 0.40.
Prices had already dropped sharply on Monday after new data from the Indian Sugar Mill Association (ISMA) showed a major jump in India’s sugar production. According to ISMA, India produced 4.11 million metric tons of sugar between October and November — a 43% increase from last year. As of November 30, 428 sugar mills across the country were actively crushing cane.
However, the fall in prices was cushioned by a stronger Brazilian real, which hit a 2.5-week high against the U.S. dollar. A strong real makes Brazilian sugar more expensive on the global market, discouraging exports and prompting traders to buy back some of their short positions.
Why Sugar Prices Are Under Pressure
The global sugar market is facing expectations of abundant supplies:
-
Brazil’s crop forecasting agency Conab raised its 2025/26 sugar production estimate to 45 million metric tons.
-
Industry group Unica reported an 8.7% increase in sugar output in Brazil’s Center-South region in early November, pushing total production so far to 39.179 million metric tons.
-
The International Sugar Organization (ISO) predicts a global surplus of 1.625 million metric tons for 2025–26, a major turnaround from last year’s deficit. This surplus is driven by higher output in India, Thailand, and Pakistan.
What’s Supporting Prices
Despite the bearish supply data, a few developments are helping limit the decline in sugar prices:
-
Last Friday, sugar futures jumped to a 6-week high after StoneX cut its forecast for Brazil’s 2026/27 sugar output.
-
India’s food ministry is considering raising the price of ethanol used for fuel blending — a move that could encourage sugar mills to divert more cane toward ethanol instead of producing sugar.
-
On November 14, India announced it will allow the export of 1.5 million metric tons of sugar in 2025/26 — lower than earlier expectations. Since 2022/23, India has restricted sugar exports due to production challenges.
