March NY world sugar #11 (SBH26) on Wednesday closed down -0.34 (-2.04%), and December London ICE white sugar #5 (SWZ25) closed down -7.30 (-1.59%).

Sugar prices fell sharply for a second day on Wednesday, with London sugar sliding to a 2-week low.  Sugar prices are falling due to a negative carryover from Tuesday, when Covrig Analytics projected a global sugar surplus of +4.1 MMT for the 2025/26 season.

NY sugar initially climbed to a 1.75-month high on Tuesday on signs of lower sugar content from this year's Brazil sugar crush.   Last Thursday, Unica reported that the sugar content in Brazil's Center-South sugarcane crushed cane in the first half of September dropped to 154.58 kilograms per ton (kg/ton) compared to 160.07 kg/ton in the same period a year earlier.  

Higher sugar output in Brazil is bearish for prices.  Unica reported last Thursday that Brazil's Center-South sugar output in the first half of September rose by +15.7% y/y to 3.622 MT.  Also, the percentage of sugarcane crushed for sugar by Brazil's sugar mills in the second half of August increased to 53.49% from 47.74% the same time last year.  However, cumulative 2025-26 Center-South sugar output through mid-September fell -0.1% y/y to 30.388 MMT.

The outlook for higher sugar exports from India is negative for sugar prices, as abundant monsoon rains may produce a bumper sugar crop.  India's Meteorological Department reported last Tuesday that the cumulative monsoon rain in India as of September 30 was 937.2 mm, 8% above normal and the strongest monsoon in 5 years.  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 34.9 MMT, citing larger planted cane acreage.  That would follow a -17.5% y/y decline in India's sugar production in 2024/25 to a 5-year low of 26.2 MMT, according to the Indian Sugar Mills Association (ISMA).  

Another bearish factor for sugar was the recent assertion from sugar trader Sucden that India may divert 4 MMT of sugar to make ethanol in 2025/26, which is not enough to ease the country's sugar surplus and may prompt India's sugar mills to export as much as 4 MMT of sugar, above earlier expectations of 2 MMT.  India is the world's second-largest producer of sugar.

The outlook for higher sugar production in Thailand is bearish for prices after the Thai Sugar Miller Corp projected last Wednesday that Thailand's 2025/26 sugar crop will increase by +5% y/y to 10.5 MMT.  On May 2, Thailand's Office of the Cane and Sugar Board reported that Thailand's 2024/25 sugar production rose +14% y/y to 10.00 MMT.  Thailand is the world's third-largest sugar producer and the second-largest exporter of sugar.

On August 29, the International Sugar Organization (ISO) forecast a global sugar deficit for the 2025/26 season, the sixth consecutive year of sugar deficits.  ISO projects a global 2025/26 sugar deficit of -231,000 MT, down from the -4.88 MMT shortfall in 2024/25.  ISO also projects 2025/26 global sugar production will rise by +3.3% y/y to 180.6 MMT, and 2025/26 global sugar consumption will increase +0.3% y/y to 180.8 MMT.

The USDA, in its bi-annual report released May 22, projected that global 2025/26 sugar production would climb +4.7% y/y to a record 189.318 MMT and that global 2025/26 human sugar consumption would increase +1.4% y/y to a record 177.921 MMT.  The USDA also forecasted that 2025/26 global sugar ending stocks would climb +7.5% y/y to 41.188 MMT.  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  FAS predicted that India's 2025/26 sugar production would rise +25% y/y to 35.3 MMT due to favorable monsoon rains and increased sugar acreage.  FAS predicted that Thailand's 2025/26 sugar production will climb +2% y/y to 10.3 MMT.