March NY world sugar #11 (SBH26) today is up +0.33 (+2.34%), and March London ICE white sugar #5 (SWH26) is up +1.20 (+0.30%).
Sugar prices are sharply higher as today’s fall in the dollar index ($DXY) to a 1-week low has sparked short covering in sugar futures.An excessively short position in sugar futures by funds could add fuel to a short-covering rally. Last Friday’s weekly Commitment of Traders (COT) report showed funds boosted their short positions in NY world sugar futures and options by 57,104 in the week ended February 3 to a record 239,232 net short positions (data from 2006).
Sugar prices have been in a gradual decline over the past three months, with NY sugar falling to a 3-month low last Friday and London sugar slumping to a 5-year nearest-futures low last Monday, amid continued concerns about global sugar surpluses. Last Friday, Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through mid-January rose by +0.9% y/y to 40.236 MMT. Also, the ratio of cane crushed for sugar rose to 50.78% in 2025/36 from 48.15% in 2024/25.
The outlook for persistent global sugar surpluses is weighing on prices. Last Wednesday, analysts from sugar trader Czarnikow said they expect a global sugar surplus of 3.4 MMT in the 2026/27 crop year, following an 8.3 MMT surplus in 2025/26.
On January 29, Green Pool Commodity Specialists said that they expect a 2.74 MMT global sugar surplus for 2025/26 and a 156,000 MT surplus for 2026/27. Also, StoneX said last Friday it expects a global sugar surplus of 2.9 MMT in 2025/26.
The India Sugar Mill Association (ISMA) reported January 19 that India’s 2025-26 sugar output from Oct 1-Jan 15 is up +22% y/y to 15.9 MMT. The ISMA on November 11 raised its 2025/26 India sugar production estimate to 31 MMT from an earlier forecast of 30 MMT, up +18.8% y/y. The ISMA also cut its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, which may allow India to boost its sugar exports. India is the world’s second-largest sugar producer.