Global Sugar Market Faces Fresh Headwinds as Major Producers Ramp Up Output

March New York sugar futures (#11 SBH26) slipped 0.03 points to trade -0.20% lower, while London ICE white sugar (#5 SWH26) declined 2.90 points or -0.68%. The downward momentum reflects mounting concerns over expanding supplies from the world’s leading producers, particularly a significant surge in Indian production.

India’s Production Surge Reshapes Supply Outlook

India’s output jumped dramatically in the early crushing season. The India Sugar Mill Association reported that sugar production from October through November surged 43% year-over-year to 4.11 million metric tons (MMT). The active mill count also expanded, with 428 facilities crushing cane by November 30, up from 376 mills a year earlier—a clear signal of accelerated processing.

Looking ahead, the ISMA raised its full-year 2025/26 production forecast to 31 MMT from 30 MMT, representing an 18.8% year-over-year climb. This revision reflects favorable monsoon conditions; India’s Meteorological Department logged cumulative monsoon rainfall of 937.2 mm through late September, running 8% above historical norms and marking the strongest monsoon performance in five years. The National Federation of Cooperative Sugar Factories projects even higher levels, forecasting production could reach 34.9 MMT, a 19% year-over-year increase.

The rebound is particularly notable after India’s 2024/25 harvest fell to a five-year low of 26.1 MMT, down 17.5% year-over-year.

Brazil and Thailand Poised for Record Harvests

Brazil’s Center-South region, which accounts for roughly 90% of the nation’s output, posted strong year-to-date figures. The first half of November saw production rise 8.7% year-over-year to 983 MT, with cumulative 2025/26 output through mid-November climbing 2.1% to 39.179 MMT.

Brazil’s official crop forecaster, Conab, lifted its full-year 2025/26 production estimate to 45 MMT in early November, up from a previous projection of 44.5 MMT. The USDA’s Foreign Agricultural Service projects an even larger harvest—44.7 MMT, representing 2.3% growth year-over-year.

Thailand, the world’s third-largest producer and second-largest exporter, is also expanding. The Thai Sugar Millers Corp projects 2025/26 production at 10.5 MMT, marking a 5% year-over-year increase from prior season levels of 10 MMT.

International Organizations Forecast Surplus Conditions

The International Sugar Organization fundamentally shifted its outlook in mid-November, predicting a 1.625 MMT surplus for 2025/26, a dramatic reversal from the 2.916 MMT deficit recorded in 2024/25. This marks a sharp contrast to its August forecast, which anticipated a modest 231,000 MT deficit.

The USDA projects global production climbing 4.7% year-over-year to a record 189.318 MMT, while human consumption is expected to grow just 1.4% to 177.921 MMT. Global ending stocks are forecast to accumulate 7.5% year-over-year to 41.188 MMT.

Private trader Czarnikow amplified concerns, boosting its 2025/26 surplus projection to 8.7 MMT in early November, up 1.2 MMT from a September estimate of 7.5 MMT.

Mixed Signals on Policy and Exports

India’s reduced ethanol diversion offers some upside. The ISMA trimmed its forecast for sugar earmarked for ethanol production to 3.4 MMT from a July estimate of 5 MMT, potentially freeing additional volumes for commercial sales. However, this advantage is offset by the food ministry’s cap on exports: only 1.5 MMT are permitted for the 2025/26 season, below prior estimates of 2 MMT.

The supply surplus narrative has pressured prices since early October, with New York sugar hitting a 5-year low on November 6 (SBH26) and London sugar posting a 4.75-year nearest-futures low on November 13 (SWZ25).