Rich Asplund

Tue, Jun 24, 2025, 11:52 AM4 min read

July NY world sugar #11 (SBN25) Tuesday closed down -0.27 (-1.68%), and August London ICE white sugar #5 (SWQ25) closed up +0.50 (+0.11%).

Sugar prices on Tuesday settled mixed, with NY sugar slumping to a 4-year nearest-futures low.  Tuesday's -5% plunge in crude prices (CLQ25) weighed on sugar prices.  Lower crude prices undercut ethanol prices and may prompt the world's sugar mills to divert cane crushing toward sugar production rather than ethanol, thus boosting sugar supplies.

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However, sugar prices recovered from their worst levels, with London sugar pushing into positive territory, as the decline in the dollar index (DXY00) to a one-week low prompted some short covering in sugar futures.

Sugar prices have fallen over the past three months due to expectations of a global sugar surplus.  On May 22, the USDA, in its biannual report, projected that global 2025/26 sugar production would increase by +4.7% year-over-year (y/y) to a record 189.318 million metric tons (MMT), with a global sugar surplus of 41.188 MMT, up 7.5% year-over-year.

The outlook for higher sugar production in India, the world's second-largest producer, is bearish for prices.  On June 2, India's National Federation of Cooperative Sugar Factories projected that India's 2025/26 sugar production would climb +19% y/y to 35 MMT, citing larger planted cane acreage.  The outlook for abundant rainfall in India could lead to a bumper sugar crop, which is bearish for prices.  On April 15, India's Ministry of Earth Sciences projected an above-normal monsoon this year, with total rainfall forecast to be 105% of the long-term average.  India's monsoon season runs from June through September.

Signs of larger global sugar output are negative for prices.  On May 22, the USDA's Foreign Agricultural Service (FAS) predicted that Brazil's 2025/26 sugar production would rise +2.3% y/y to a record 44.7 MMT.  Also, India's 2025/26 sugar production is projected to rise +25% y/y to 35.3 MMT, citing favorable monsoon rains and increased sugar acreage.  In addition, Thailand's 2025/26 sugar production is expected to climb +2% y/y to 10.3 MMT.