Sugar Prices Decline Amid a Stronger Dollar

Latest Sugar Market Updates

March contracts for New York world sugar #11 (SBH26) have slipped by 0.05 points, or 0.33%, while March London ICE white sugar #5 (SWH26) has dropped 1.20 points, or 0.28%.

The recent strength of the US dollar is putting downward pressure on sugar prices. The dollar index (DXY00) has reached its highest level in four weeks, negatively impacting a range of commodities, including sugar.

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Despite the downward trend, expectations of index fund purchases for annual commodity index rebalancing are helping to limit sugar’s losses. Citigroup anticipates that the two largest commodity indexes, BCOM and S&P GSCI, will channel approximately $1.2 billion into sugar futures contracts over the coming week as part of their rebalancing process.

Last Monday, New York sugar reached its highest level in two and a half months, fueled by predictions of tighter future supplies from Brazil. According to Safras & Mercado, a consulting firm, Brazil’s sugar output for the 2026/27 season is projected to decrease by 3.91% to 41.8 million metric tons (MMT), down from an expected 43.5 MMT in 2025/26. The firm also forecasts that Brazil’s sugar exports will decline by 11% year-over-year to 30 MMT in 2026/27.

Conversely, last Friday saw sugar prices hit three-week lows due to signs of increased production in India. The India Sugar Mill Association (ISMA) reported that Indian sugar output from October 1 to December 31 for the 2025-26 season surged by 25% year-over-year to 11.90 MMT, compared to 9.54 MMT during the same period last year. On November 11, ISMA raised its estimate for India’s 2025/26 sugar production to 31 MMT, up 18.8% from the previous year. Additionally, ISMA reduced its projection for sugar used in ethanol production to 3.4 MMT, down from July’s forecast of 5 MMT, potentially allowing for increased sugar exports. India remains the world’s second-largest sugar producer.

Expectations of greater sugar exports from India have also weighed on prices. India’s food secretary recently indicated that the government may authorize additional sugar exports to address a domestic surplus. In November, the food ministry announced that mills would be permitted to export 1.5 MMT of sugar during the 2025/26 season. India implemented an export quota system in 2022/23 following reduced production caused by late-season rains and tighter domestic supplies.

Global Sugar Production and Market Outlook

Forecasts for record-breaking sugar output in Brazil are contributing to a bearish outlook for prices. On November 4, Brazil’s crop agency Conab raised its 2025/26 sugar production estimate to 45 MMT, up from 44.5 MMT previously. Unica reported that, as of November, Brazil’s Center-South region had produced 39.904 MMT of sugar for the 2025-26 season, a 1.1% increase from the previous year. The proportion of sugarcane processed for sugar also rose to 51.12% in 2025/36, compared to 48.34% in 2024/25.

The International Sugar Organization (ISO) projected on November 17 that the global sugar market will see a surplus of 1.625 million MT in 2025-26, following a deficit of 2.916 million MT in 2024-25. This surplus is attributed to higher output in India, Thailand, and Pakistan. ISO expects global sugar production to rise by 3.2% year-over-year to 181.8 million MT in 2025-26. Meanwhile, sugar trader Czarnikow increased its forecast for the 2025/26 global sugar surplus to 8.7 MMT, up from 7.5 MMT estimated in September.

Thailand is also expected to boost sugar production, which could further pressure prices. The Thai Sugar Millers Corp predicted on October 1 that the country’s 2025/26 sugar crop would grow by 5% year-over-year to 10.5 MMT. Thailand ranks as the world’s third-largest sugar producer and the second-largest exporter.

According to the USDA’s bi-annual report released on December 16, global sugar production for 2025/26 is forecast to increase by 4.6% year-over-year to a record 189.318 MMT, while worldwide human sugar consumption is expected to rise by 1.4% to 177.921 MMT. The USDA also anticipates that global sugar ending stocks will decrease by 2.9% to 41.188 MMT. The Foreign Agricultural Service (FAS) of the USDA projects that Brazil’s 2025/26 sugar output will climb by 2.3% to a record 44.7 MMT, India’s production will jump by 25% to 35.25 MMT due to favorable monsoon conditions and expanded planting, and Thailand’s output will rise by 2% to 10.25 MMT.