Sugar Market 2025: Production Squeeze in India Supports Prices Amid Weather Concerns

The global sugar market enters the late-summer period with heightened uncertainty and visible price stability. India, the world’s second-largest sugar producer, has just posted an 18% year-on-year drop in output, totaling 28.08 million tons by the end of July. This decline—confirmed by the National Federation of Cooperative Sugar Factories—results from lower harvests in key states like Maharashtra (down 23.1%), Karnataka (down 21.5%), and Tamil Nadu, where crushing season is mostly over. In contrast, Uttar Pradesh saw a modest 0.3% increase. Overall, India’s reduction in production is linked directly to adverse weather, impacted crushing schedules, and reduced cane availability.

With only 516 of 532 cooperative mills active, and nationwide cane crushing down from 340.4 to 305.5 million tons, the supply side shows visible contraction. Yet, domestic price movements for sugar have stayed stable, thanks to managed supply, careful stock policies, and expectations that recent monsoons in western and southern India will support decent sowing for the next crop. As the world market awaits detailed season-end figures and forecasts ahead of the 2025–26 cycle, attention now turns to global stocks, Brazil’s output, looming El Niño weather impacts, and geopolitical influences on trade. Below we dive deeper into prices, fundamentals, global outlook, and a short-term forecast that sugar market participants need to follow closely.

📈 Market Prices

Origin	Type	Location	Price (EUR/kg)	Prev. Price	Weekly Chg	Sentiment
LT	ICUMSA 45, 0.2-1.2 mm	Mirijampole	0.55	0.55	0.00%	Stable
LT	ICUMSA 45, 0.2-1.2 mm	Mirijampole	0.56	0.56	0.00%	Stable
GB	ICUMSA 32, 0.3-0.6 mm	Norfolk	0.55	0.56	-1.79%	Mildly Bearish

• EU prices remain mostly flat week-on-week in the Baltic states and UK.
• Minor declines observed in British-origin product; price corrections appear limited.
• Sentiment is stable, with some localized bullishness due to Indian news.

🌍 Supply & Demand Drivers

• India: 18% YoY production decline (28.08m tons); Maharashtra and Karnataka drive contraction. Uttar Pradesh stable.
• Brazil: Output robust, record levels expected for 2025 per CONAB and Unica, partly offsetting Asian weakness.
• Thailand: Second consecutive weak harvest; drought impacts linger.
• Global stocks: Downward trend, especially in Asia. World stocks/use ratio tightened.
• Speculative positioning: CFTC data shows funds maintaining moderate net longs on NY sugar futures amid weather and supply risk.

📊 Fundamentals

Country	2025 Output (m tons)	Change YoY	2025 Ending Stocks
India	28.08	-18%	Stock decline likely
Brazil*	~40.0	+4%	Up
Thailand	9.0	-8%	Flat
EU	15.5	-3%	Flat

*Brazil numbers based on industry outlooks Q3/2025.

⛅ Weather Outlook

• India: Monsoon activity rebounded in key cane areas (Maharashtra, Karnataka, Tamil Nadu) in July, improving near-term outlook. Native monsoon forecasts indicate average to above-average rainfall next 30 days, which should support 2025 crop yields—though extreme events remain a risk.
• Brazil: Mostly favorable; rain interruptions limited. Minor frost scares in south not significant so far.
• Thailand: Dryness persists in north and central regions; next month’s rainfall critical for plantings.

🌏 Global Production & Stocks Comparison

Exporter	Est. 2025 Exports (m tons)
Brazil	~28
India	2–3*
Thailand	8
EU	2

^*Subject to government export restrictions given tight supply.

📆 Outlook & Recommendations

• India’s production gap is providing a short-term floor to global prices, though Brazil’s supply counterbalances this.
• Monitor Indian government’s export policies—any changes could trigger strong market moves.
• Thai weather remains a bullish risk for Q4–Q1 trade; watch planting progress closely.
• Speculation could intensify if El Niño conditions develop in Asia and South America.
• Trading advice:
  • Producers: Consider forward selling for late-2025 contracts on price strength.
  • Importers: Secure supply for Q1–Q2 2026; look for dips to build inventory.
  • Speculators: Watch for breakout above 26 USc/lb (NY), but protect against short-term retracements.

📅 3-Day Regional Price Forecast (CBOT & Euronext)

Exchange	Current Price (USD/t)	Forecast (USD/t)	Sentiment
ICE NY (Raw)	585	580–590	Stable/Bullish
Euronext (White)	720	715–725	Stable

• Short-term price action expected to remain within tight ranges.
• Indian and Thai news flow could trigger volatility; monitor weather reports and government guidance.