July NY world sugar #11 (SBN25) fell -0.08 (-0.49%), while August London ICE white sugar #5 (SWQ25) dropped -5.30 (-1.12%), reaching a four-year nearest-futures low. Prices have declined over two months due to expectations of a global sugar surplus.
According to the USDA’s May 22 biannual report, global 2025/26 sugar production is projected to rise 4.7% year-over-year to a record 189.318 million metric tons (MMT), with a global surplus of 41.188 MMT, up 7.5% from the previous season.
The bearish outlook stems from expectations of higher production in key regions. India, the world’s second-largest producer, is forecast to see 2025/26 production climb 19% y/y to 35 MMT, driven by expanded cane acreage, according to the National Federation of Cooperative Sugar Factories. Above-normal monsoon conditions, projected by India’s Ministry of Earth Sciences on April 15 to reach 105% of the long-term average, further support favorable growing conditions during the June-September monsoon season.
Brazil’s 2025/26 sugar production is expected to increase 2.3% y/y to a record 44.7 MMT, per USDA Foreign Agricultural Service data. Meanwhile, Thailand’s 2025/26 output is forecast to rise 2% y/y to 10.3 MMT.
Amid these bearish factors, the Indian government announced on January 20 that sugar mills can export 1 MMT of sugar for the current season, easing 2023 export restrictions. Despite this, the Indian Sugar Mills Association (ISMA) projects 2024/25 production will drop 17.5% y/y to a five-year low of 26.2 MMT, with October-to-May output reaching 25.74 MMT—down 17% from last year. Indian Food Secretary Chopra also indicated 2024/25 exports may total only 800,000 MT, below earlier expectations.
Thailand, the world’s third-largest sugar producer and second-largest exporter, reported 2024/25 production rose 14% y/y to 10.00 MMT.
Conversely, Brazil’s Center-South region showed declining output in early 2025. Unica reported May’s sugar production fell 6.8% y/y to 2.408 MMT, with cumulative output through mid-May down 22.7% y/y to 3.989 MMT.
The International Sugar Organization (ISO) raised its 2024/25 global sugar deficit forecast to -5.47 MMT—the highest level since 2015—up from -4.88 MMT in February. This suggests a tighter market following the 2023/24 surplus of 1.31 MMT, though the ISO also reduced its 2024/25 production forecast to 174.8 MMT.
Drought and heat last year sparked fires in Brazil’s key sugar-producing state of Sao Paulo, damaging crops. Green Pool Commodity Specialists estimated up to 5 MMT of cane was lost. Conab, Brazil’s crop forecasting agency, projects 2024/25 Brazilian sugar production to fall 3.4% y/y to 44.118 MMT due to reduced yields.
The USDA forecasts global 2025/26 production will reach 189.318 MMT, with human consumption rising 1.4% y/y to 177.921 MMT, and ending stocks increasing 7.5% y/y to 41.188 MMT.