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Summary:
Sugar futures have hit a five-year low, trading below 14.5 US cents per pound. The fall is mainly driven by rising supplies from Brazil and Thailand, along with uncertainty around India’s sugar export and ethanol policies. The combined global surplus may keep prices subdued in the near term.
Sugar Prices Under Pressure as India Mulls Export Decision
Sugar futures continue to hover below 14.5 US cents a pound, marking their lowest level in nearly five years. The trend reflects growing concerns over global supply and India’s domestic production decisions that could further weigh on the market.
India is reportedly considering allowing one million tonnes (mt) of sugar exports, as pressure mounts from domestic sugar mills seeking relief. These mills are anxious that limited ethanol allocations could leave them with surplus sugar stocks. Oil marketing companies have allocated only 28% of the 10.5 billion litres of ethanol requirement to sugar-based producers, restricting their ability to divert sugarcane toward ethanol.
A final decision on export approvals may come soon, with the Committee of Ministers, chaired by Home Affairs Minister Amit Shah, expected to review the matter next week.
Brazil’s Record Sugar Output Adds to Global Surplus
Meanwhile, Brazil’s sugar production continues to climb. The Sugar and Bio-energy Association (Unica) has projected a sharp increase in sugarcane harvests in the Center-South region for the 2025–26 season. Consensus estimates suggest that Brazil could produce 42.25 million tonnes of sugar in 2026–27 (April–March), up from 40.5 million tonnes in 2025–26.
Interestingly, Brazil faces a situation similar to India — ethanol from corn is proving more competitive, prompting mills to channel more sugarcane into sugar production rather than ethanol.
Thailand’s Higher Production Deepens Market Surplus
Adding to global worries, Thailand’s sugar output is also rising, exacerbating the supply glut. The increased production from multiple origins suggests that surplus conditions may persist for some time, limiting the scope for any near-term price recovery.
Further clarity on India’s supply outlook is expected when the Indian Sugar and Bio-Energy Manufacturers Association releases its review for the current season, which began on October 1.
Conclusion
The sugar market remains under bearish pressure, with key producers like India, Brazil, and Thailand all contributing to a global oversupply. Unless weather or policy interventions significantly disrupt output, prices are likely to stay muted below 14.5 US cents a pound in the short to medium term.