May NY World Sugar #11 (SBK26) closed down -0.21 (-1.44%) on Tuesday, and May London ICE White Sugar #5 (SWK26) closed -2.10 (-0.50%).
Sugar prices fell -11% on crude oil prices on Tuesday. A sell-off in crude oil prices lowers ethanol prices, prompting the world’s sugar mills to stop growing ethanol and sugarcane, thereby increasing the supply of sugar.
Crude oil prices fell on Tuesday, reversing some of the gains over the past week and a half due to the Iran conflict. Oil prices fell after President Trump said the war would end “very soon” and as the G-7 countries planned to release oil reserves in a coordinated manner if needed.
On February 12, sugar prices fell to 5.25-year near-term lows on concerns that the world sugar glut will continue. On February 11, analysts at sugar trader Czarniko said they expected a global sugar addition of 3.4 MMT in the 2026/27 crop year, after a surplus of 8.3 MMT in 2025/26. Also, Greenpool Commodity Specialists said on January 29 that they expect a global sugar surplus of 2.74 MMT for 2025/26 and a surplus of 156,000 MT for 2026/27. Meanwhile, StoneX said on February 13 that it expects a global sugar surplus of 2.9 MMT in 2025/26.
The International Sugar Organization (ISO) on February 27 forecast a sugar surplus of +1.22 MMT (million metric tons) in 2025-26, after a deficit of -3.46 MMT in 2024-25. The additional surplus is due to increased sugar production in India, Thailand and Pakistan, the ISO said. ISO forecasts world sugar production to increase +3.0% y/y to 181.3 million MMT in 2025-26.
Signs of lower sugar production in Brazil are supporting sugar prices, after Unica reported on February 18 that sugar production in central-south Brazil fell 36% y/y to just 5,000 MT in the second half of January. However, aggregate Central-South sugar output rose +0.9% y/y to 40.24 MMT in January 2025-26.
The Indian Sugar and Bioenergy Manufacturers Association (ISMA) reported on March 6 that India’s 2025-26 sugar production rose +12% y/y to 24.75 MMT from October 1 to February 28. Last Wednesday, ISMA estimated India’s 2025/26 sugar production at 29.3 MMT, up 12% y/y, down from the previous estimate of 30.95 MMT. The ISMA also cut its estimate of sugar used for ethanol production in India to 3.4 MMT from the July 5 MMT forecast, which may allow India to boost its sugar exports. India is the second largest producer of sugar in the world.
