March NY world sugar #11 (SBH26) on Tuesday closed down -0.23 (-1.60%), and March London ICE white sugar #5 (SWH26) closed down -7.30 (-1.80%).
Sugar prices retreated on Tuesday, with London sugar falling to a 5-year nearest-futures low. 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 Tuesday, 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.
Sugar prices have been weighed down amid prospects of higher sugar exports from India, after India’s food secretary said the government may permit additional sugar exports to reduce a domestic supply glut. In November, India’s food ministry said it would allow mills to export 1.5 MMT of sugar in the 2025/26 season. India introduced a quota system for sugar exports in 2022/23 after late rain reduced production and limited domestic supplies.
The outlook for persistent global sugar surpluses is bearish for prices. Covrig Analytics on December 12 raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT in October. However, Covrig projects that the 2026/27 global sugar surplus will fall to 1.4 MMT, as weak prices discourage production.