Sugar Market Update: Output Slump in India Tightens Global Supply, Prices Hold Firm

The global sugar market faces a pivotal moment as India, one of the world’s largest sugar producers, records an 18% year-on-year output decline for the 2024-25 season. Weather-induced challenges, including deficit rains and heightened disease pressure, have slashed cane availability and reduced recovery rates, pushing national production down to 25.75 million tonnes. Major producing states like Maharashtra, Uttar Pradesh, and Karnataka have borne the brunt, with production drops ranging from 10% to 27%. Despite these setbacks, the Indian government’s export-friendly stance and stable ex-mill prices have supported liquidity within the sector, allowing mills to clear a significant portion of cane dues. Globally, this contraction in Indian supply is tightening the market, especially as Brazil’s strong crop is offset by logistical bottlenecks and robust domestic demand. Meanwhile, weather outlooks for key cane-growing regions suggest improved conditions ahead, potentially setting the stage for a rebound in 2025-26. However, the current fundamentals point to a market that remains finely balanced, with production shortfalls, ethanol diversion, and evolving regulatory frameworks all shaping future price dynamics. For traders and industry stakeholders, vigilance is warranted as the market navigates through this period of reduced output and policy shifts.

📈 Prices

Origin	Type	Location	Latest Price (€/kg)	Prev. Price (€/kg)	Date	Sentiment
GB	ICUMSA 32, 0.450-0.600 mm	Norfolk	0.56	0.55	2025-05-13	Firm
GB	ICUMSA 32, 0.300-0.600 mm	Norfolk	0.56	0.55	2025-05-13	Firm
GB	ICUMSA 45, 0.212-0.425 mm	Norfolk	0.56	0.55	2025-05-13	Firm
UA	ICUMSA 45, 0.4-1.00 mm	Vinnytsia Oblast	0.58	0.59	2025-05-13	Stable
CZ	ICUMSA 45, 0.4-1.00 mm	Vyškov	0.54	0.54	2025-05-13	Stable
DE	ICUMSA 45, 0.4-0.65 mm	Berlin	0.66	0.67	2025-05-13	Soft
LT	ICUMSA 45, 0.2-1.2 mm, 99.7%	Mirijampole	0.53	0.53	2025-05-12	Stable

🌍 Supply & Demand

• India’s 2024-25 output: 25.75 mln t (down 18% y/y), with major declines in Maharashtra (80.95 mln t), Uttar Pradesh (92.75 mln t), and Karnataka (40.40 mln t).
• Global stocks: Expected to tighten as Indian output falls and Brazil’s logistics slow exports.
• Ethanol Diversion: 3.2 mln t of sugar diverted (slightly below target), supporting domestic supply.
• Closing stocks: India’s end-season stocks at 4.8–5.0 mln t, sufficient for Oct–Nov 2025 demand.
• Demand: Remains robust in Asia and MENA; EU demand steady but facing higher input costs.

📊 Fundamentals

• Production drivers: Lower cane availability, reduced recovery rates (9.3% vs. 10.1% prev.), weather/disease impacts.
• Policy: New Sugar (Control) Order 2025 for digital integration, better transparency, and regulatory oversight.
• Export policy: India’s government supports exports, aiding liquidity and timely payments to farmers.
• Cost pressures: Calls for higher minimum selling price and ethanol procurement price to offset rising costs.
• Speculative activity: Managed money remains moderately net long, reflecting supply-side risks.

☀️ Weather Outlook

• India: Monsoon forecasts for 2025-26 are positive, supporting a potential production rebound. Recent deficit rains and disease pressure have weighed on the 2024-25 crop.
• Brazil: Weather remains generally favorable, but periodic rains are slowing harvest and export logistics.
• Thailand: Wetter conditions expected, but not enough to fully offset prior drought impacts.

🌐 Global Production & Stocks

Country	2023-24 Output (mln t)	2024-25 Output (mln t)	Change (%)	Stocks (mln t)
India	31.54	25.75	-18%	4.8-5.0
Brazil	40.0	41.5 (est.)	+3.8%	6.0
Thailand	8.0	7.5	-6.3%	1.2
EU	15.5	15.3	-1.3%	2.1

📆 Trading Outlook & Recommendations

• Monitor Indian policy signals—any export restriction or price floor adjustments could tighten global supply further.
• Brazilian logistics and weather remain crucial for global flows; delays may support prices in coming weeks.
• Watch ethanol policy changes—higher diversion targets could reduce available sugar for food markets in 2025-26.
• Consider strategic buying on dips, as fundamentals remain supportive and stocks are tight.
• Exporters in EU and Brazil should capitalize on firm prices, but hedge against potential volatility from policy or weather shocks.

🔮 3-Day Regional Price Forecast

Region/Exchange	Current Price (€/kg)	3-Day Forecast (€/kg)	Trend
GB (Norfolk, ICUMSA 32/45)	0.56	0.56–0.57	Stable/Firm
DE (Berlin, ICUMSA 45)	0.66	0.65–0.67	Slightly Soft
CZ (Vyškov, ICUMSA 45)	0.54–0.55	0.54–0.56	Stable
UA (Vinnytsia, ICUMSA 45)	0.58	0.57–0.59	Stable
LT (Mirijampole, ICUMSA 45)	0.53–0.54	0.53–0.55	Stable