Global sugar prices are entering a phase of pronounced weakness as the market absorbs a growing surplus outlook ahead of the 2025–26 season. Producers across major regions, including India, Thailand, and Brazil, are expected to boost output, exerting downward pressure on prices that have already slipped to multi-year lows on benchmark exchanges. Despite recent volatility and intermittent support from policy moves in India, supply-side fundamentals continue to dominate market sentiment. As Brazilian mills ramp up sugar output in response to softer energy prices and India projects a robust rebound in harvests, futures have responded with a decisive drop. Weather conditions have generally favored crop growth, intensifying the bearish narrative. The export curbs by India offer some buffer, but not enough to offset the impact of increased production forecasts from other key exporters. With speculative sentiment turning sharply negative and inventory risks mounting, producers and traders face a complex price environment—one characterized by supply-led headwinds and subdued sentiment. The next few months will be critical as the market navigates the dual forces of policy restrictions and global output expansion.
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📈 Prices & Market Sentiment
| Contract/Market | Closing Price | Weekly Change | Market Sentiment |
|---|---|---|---|
| ICE Raw Sugar (NY) | 16.44 ¢/lb ($313.25/tonne) | -2.0% | Bearish |
| London White Sugar | $461.90/tonne | -3.8% | Bearish |
| Sugar FCA Vyškov (CZ, ICUMSA 45, 0.16–0.8 mm) | €0.57/kg | +3.6% | Stable |
| Sugar FCA Mirijampole (LT, ICUMSA 45, 0.2–1.2 mm) | €0.53/kg | Unchanged | Stable |
| Sugar FCA Norfolk (GB, ICUMSA 32/45) | £0.56/kg | Unchanged | Stable |
🌍 Supply & Demand Drivers
- Bumper Crop Prospects: India is forecast to see sugar production surge by 26.3% YoY in 2025–26 to 35 million tonnes with expanded acreage and favorable weather, while Brazilian harvests accelerate.
- Export Policies: India maintains a 1 million tonne export cap to prioritize ethanol blending, unlikely to be lifted soon.
- Energy Prices: Brent crude near $66.26/bbl (-12% YTD); less attractive ethanol pricing leads Brazilian mills to focus on sugar.
- Speculative Positioning: CFTC net long at just 5,629 contracts (as of May 27); short positions among money managers up 109% since April, intensifying downside risk.
- Mixed Global Output: Revised projections lower global surplus (now 7.8 Mt from 9.3 Mt), but India’s rebound overwhelms cuts in Brazil/Thailand.
📊 Market Fundamentals & Regional Comparison
| Country | 2024/25 Output (Mt) | 2025/26 Projection (Mt) | Change (%) | Export Policy |
|---|---|---|---|---|
| India | 29.3 | 35.0 | +19.4% | Export cap (1 Mt) |
| Brazil | 40.0 | 39.2 | -2.0% | Free |
| Thailand | 11.6 | 10.8 | -6.9% | Free |
| EU | 15.2 | 15.0 | -1.3% | Export quota |
🌤️ Weather & Crop Outlook
- India: Southwest monsoon arrived on time; current assessments predict well-distributed rainfall aiding crop health and acreage expansion.
- Brazil: Dry conditions accelerated early harvest; continued dryness remains conducive to cane crushing but could reduce yields if prolonged.
- Thailand: Recovering from earlier drought, but overall output still below historical levels due to past weather shocks.
📆 Trading Outlook & Key Recommendations
- Sugar prices remain pressured amid strong supply: Downside risk prevails for Q3 2025.
- Large speculative shorts and aggressive positioning amplify near-term volatility—producers should consider hedging on futures dips.
- Exporters in India should monitor policy for any potential easing, though domestic mandates remain firm for now.
- Physical buyers may find attractive procurement opportunities given multi-year price lows.
- Monitor weather in Brazil/India for late-season surprises that could influence yields and shift market tone.
⏩ 3-Day Price Forecast (Key Exchanges)
| Exchange/Market | Current Price | Forecast (Day 1) | Forecast (Day 2) | Forecast (Day 3) |
|---|---|---|---|---|
| ICE Raw Sugar (NY) | 16.44 ¢/lb | 16.30 ¢/lb | 16.15 ¢/lb | 16.00 ¢/lb |
| London White Sugar | $461.90/tonne | $458.50 | $456.00 | $455.25 |
| Sugar FCA Vyškov (CZ) | €0.57/kg | €0.56/kg | €0.56/kg | €0.55/kg |
| Sugar FCA Mirijampole (LT) | €0.53/kg | €0.53/kg | €0.52/kg | €0.52/kg |
