Lower Indian Output Sends Sugar Market Into Tight Supply Mode: ISMA Steps Trigger Export Caution

The global sugar market is navigating a period of heightened uncertainty and tightening supply as India’s 2025 production outlook turns sharply lower. According to the latest ‘Raw Text’, the Indian Sugar Mills Association (ISMA) has cut its sugar output forecast and slashed expected export volumes to just 0.7 million tonnes for the marketing year. This decision reflects India’s disappointing harvest results and a diligent effort to stabilize the domestic market amidst challenging agro-climatic conditions. With India being among the foremost sugar producers and exporters, these revisions carry weighty repercussions for global trade dynamics, price trends, and the availability of sugar for major importing nations across Asia, Africa, and the Middle East. The ISMA’s cautious export policy is expected to create a supply void on the international market, amplifying upward price pressures, while global buyers scramble for alternatives amid stagnant-to-weak production in rival origins. The entire sugar value chain, from cane growers and refiners to traders and end-users, will need to recalibrate strategies in the face of shrinking Indian exports, potentially elevated raw and refined sugar benchmarks, and renewed speculative interest. The evolving situation underscores the importance of closely monitoring not only Indian policy announcements, but also weather developments in Brazil, Thailand, and the EU.

📈 Prices

Product	ICUMSA Type	Origin	Location	Delivery Terms	Latest Price (EUR/kg)	Weekly Change	Last Update	Market Sentiment
Sugar granulated	45, 0.2–1.2 mm	LT	Mirijampole, LT	FCA	0.42	0%	2026-02-23	Neutral, possible upward bias
Sugar granulated	45, 0.2–1.2 mm	LT	Mirijampole, LT	FCA	0.42	0%	2026-02-23	Stable
Sugar granulated	32, 0.3–0.6 mm	GB	Norfolk, GB	FCA	0.42	0%	2026-02-16	Stable

🌍 Supply & Demand Overview

• India’s 2025 crop: ISMA lowers production guidance, now expecting significantly less sugar than previous years.
• Export policy: India will permit just 0.7 million tonnes of sugar exports—well below average annual shipments.
• Global impact: Export cutbacks from India will further tighten world market supplies, especially as Brazil (the world’s largest producer) also faces erratic weather and logistical challenges.
• Importers: Countries in Asia, the Middle East, and North Africa likely face higher prices and tighter availability.
• Trade dynamics: Buyers may turn to Brazil, Thailand, or the EU, but any major shortfall from India will be difficult to fully offset.

📊 Fundamentals & Drivers

• Production fundamentals: ISMA’s decision is grounded in reduced cane yields and harvested area, with unfavorable weather conditions likely a key factor.
• Stocks: Lower Indian output will diminish available exportable surplus, drawing down global stocks.
• Exports: Net international flows from India are expected to reach their lowest in years.
• Speculative flows: Market participants may adopt bullish positioning due to anticipated international scarcity.
• Supplementary price context: Spot sugar offers across Europe and UK remain steady at 0.41–0.47 EUR/kg, but these levels could soon firm up as supply constraints become more pronounced.

⛅ Weather Outlook

• Indian subcontinent: Recent weather disruptions (e.g., inadequate monsoon or dry spells) have impaired cane yields.
• Brazil: Ongoing rains in the Center-South threaten timely harvest and crush, while logistical bottlenecks impact exports.
• Thailand/EU: Stable but with vigilance needed for late-season developments.

🌐 Production & Stocks Comparison

Country	2024/25 Prod. Estimate (Mt)	Exports (Mt)	Stocks (Estimate)
India	Significantly cut (Raw Text)	0.7	Lower YoY
Brazil	Stable/High	~30	Moderate
Thailand	Normal	7–8	Stable
EU	Stable	1–2	Comfortable

📌 Trading Outlook & Recommendations

• Producers: Leverage tight supply conditions; avoid aggressive forward selling until new crop clarity emerges.
• Importers: Secure contracts early—global supplies are likely to tighten further with India’s retreat from export markets.
• Speculators: Monitor funds; a shift to net-long positions is probable as international scarcity narrative strengthens.
• Market sensitivity: Watch Indian policy for possible adjustments and global weather for production impacts elsewhere.

📆 3-Day Regional Price Forecast

Market	Direction	Comment
Europe FCA	Firm/Up	Offers hold steady but likely to tick higher on tighter exportable surplus from India
UK FCA	Stable/Firm	Unchanged, but upside risk due to global supply rerouting
Brazil FOB	Up	Increased international demand to offset Indian shortfall