Sugar prices remain relatively steady, having recovered from recent declines.
India's sugar production for the 2025/26 season is set to increase significantly due to favourable monsoon rains and slightly expanded sugarcane acreage. This improvement follows a poor 2024/25 season where production fell to a 5-year low.
The cumulative monsoon rainfall was around 1% above normal as of mid-August 2025, supporting strong sugarcane growth with adequate soil moisture and reservoir water levels 30-40% higher than last year in key growing regions.
This production boost is expected to enable India, the world's second-largest sugar producer, to export about 2 million tonnes of sugar in the 2025/26 season, after restricting exports in the previous year due to low output. The Indian Sugar and Bio-energy Manufacturers Association (ISMA) is actively seeking export permissions for this volume.
On the global sugar market, the higher Indian crop—alongside a projected 2.3% increase in Brazil's sugar production to a record 44.7 million tonnes—is contributing to expectations of a substantial global sugar surplus. The USDA forecasts global sugar production rising 4.7% year-on-year to a record 189.3 million tonnes, with ending stocks up 7.5% to over 41 million tonnes, the largest surplus in eight years.
As a result, the outlook for global sugar prices in 2025/26 is bearish, with prices retreating to multi-year lows due to anticipated surplus supplies from major producers including India. This surplus is dampening sugar prices despite steady demand. Traders and investors are closely watching Indian production updates and export policies as key factors influencing global price movements.
In Thailand, the 2025/26 sugar production is predicted to climb +2% y/y to 10.3 MMT, making the country the world's third-largest sugar producer and the second-largest exporter of sugar.
Sugar prices today are little changed as they consolidate recent losses. October London ICE white sugar #5 (SWV25) is currently down -0.30 (-0.06%), while October NY world sugar #11 (SBV25) is up +0.02 (+0.12%).
Summary:
| Factor | Impact | |----------------------------|-----------------------------------------------| | Favorable monsoon rains | +18-25% rise in India's sugar production (~35 MMT) | | Increased sugarcane acreage | Slight increase contributing to production | | Higher reservoir levels | Better water availability for crops | | Indian sugar exports | Possible 2 MMT export permission sought | | Global production | Brazil +2.3%, world +4.7% production increase | | Global sugar surplus | Forecast 7.5 MMT surplus, highest in years | | Impact on global prices | Bearish pressure, prices retreating |
In conclusion, monsoon rains have directly boosted India's sugar production prospects for 2025/26, leading to expectations of higher exports and contributing to an overall global sugar surplus that is putting downward pressure on global sugar prices during this period.
