India’s Surplus Sparks a Sugar Market Shift: Stable Pricing, Export Prospects, and Weather Risks

The global sugar market is entering a phase of significant transition driven by India’s anticipated production surplus for the 2025/26 marketing year. For the first time in several seasons, industry sources report that India may authorize up to 2 million metric tonnes of sugar exports starting in October, after years of prioritizing domestic resilience. While this move is widely expected to stabilize international markets that have been rattled by crop shortfalls elsewhere, India continues to maintain a strong internal focus, diverting about 5 million tonnes of sugar toward ethanol production to fuel its ambitious biofuel strategy. As competing exporters such as Brazil face yield constraints from erratic weather, the possibility of Indian exports is helping to soften bullish sentiment in futures markets and moderate recent price volatility.

This promising supply outlook, underpinned by steady ethanol demand, suggests domestic prices in India could remain contained, with global supply chains slightly eased. However, the delayed announcement of actual export quotas means that traders remain cautious, watching both weather forecasts and official policy signals. Meanwhile, shifts in speculative positioning, variation in global sugar inventories, and an evolving weather outlook for Brazil, Thailand, and India set the stage for potentially rapid price movements in the coming weeks.

📈 Sugar Prices at a Glance

Origin	Type	Location	Delivery Terms	Latest Price (€/kg)	Weekly Change (%)	Sentiment
LT	ICUMSA 45, 0.2-1.2mm	Mirijampole	FCA	0.56	-6.7%	Neutral to Bearish
GB	ICUMSA 32, 0.3-0.6mm	Norfolk	FCA	0.57	0%	Stable
CZ	ICUMSA 45, 0.4-1.0mm	Vyškov	FCA	0.55	0%	Neutral

🌍 Supply & Demand Drivers

• India’s Export Policy: Possible opening of 2 million tonnes for export due to surplus, with the government prioritizing internal stability and ethanol production targets.
• Ethanol Diversion: Around 5 million tonnes of sugar expected to be used for biofuel, maintaining balance in local and global markets.
• Global Supply Tension: Tightness persists after weather-related disruptions in Brazil and Thailand; Indian exports could ease deficit concerns.
• Speculative Positioning: Market participants remain cautiously optimistic but monitor official export announcements and weather developments.

📊 Fundamentals & Stock Comparisons

• India: 2025/26 production estimated above prior years; stocks healthy, but large ethanol program absorbs a significant share.
• Brazil: Weather uncertainty limits crop outlook; exports already near capacity.
• Thailand: Output recovering gradually post-drought.
• EU, Russia: Steady, modest surpluses; limited global impact.
• Africa & MENA: Heavy reliance on imports due to persistent deficits.

🌦️ Weather Outlook & Crop Impact

• India: Monsoon conditions have so far been favorable for sugarcane, with forecasts calling for average rainfall in key growing states overall, but late-season dryness could impact final yields.
• Brazil: Ongoing El Niño-related weather patterns remain a concern—unseasonal rains could hinder harvest, while some areas risk dryness.
• Thailand: Recent rains improving soil moisture; outlook tilting positive.

📅 Trading & Risk Outlook

• Monitor official statements on India’s export quota policy—price response likely once the quota is confirmed.
• Track speculative positions and global inventory readings for signs of renewed volatility.
• Consider near-term weather risks in Brazil and India as key factors for any price spikes or supply disruptions.
• End-users: Lock in forward contracts if exposed to Indian, Brazilian, or Thai supply due to ongoing weather risks.
• Producers: Evaluate hedging strategies on possible export expansion from India offsetting global tightness.

🔮 3-Day Regional Price Forecast (€/kg)

Region/Exchange	Last Close	Day 1	Day 2	Day 3
Mirijampole, LT	0.56	0.55	0.55	0.56
Norfolk, GB	0.57	0.56	0.57	0.57
Vyškov, CZ	0.55	0.55	0.55	0.55

Transitional dynamics—India’s potential re-entry to export markets, alongside ethanol policy and weather influences—suggest a major turning point for the global sugar complex. Volatility could persist until export quantities and weather outcomes are clearer.