October NY world sugar #11 (SBV25) immediately is down -0.20 (-1.27%), and August London ICE white sugar #5 (SWQ25) is down -3.30 (-0.71%).

Sugar costs immediately added to this week’s selloff, with NY Oct sugar falling to a brand new contract low and London sugar dropping to a 3-3/4 yr nearest-futures low.  Indicators of strong sugar provides amid tepid demand are weighing on costs.  On Tuesday, ICE Futures US reported that 45,112 MT of NY sugar was delivered to settle the July sugar contract, which expired on Monday, the smallest quantity delivered for a July contract in 11 years and an indication of weak demand.  On Monday, nearest-futures (SBN25) NY sugar posted a 4-1/4 yr nearest-futures low.  

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Expectations of bigger sugar provides are limiting the upside in sugar costs.  On Monday, commodities dealer Czarnikow projected a 7.5 MMT world sugar surplus for the 2025/26 season, the most important surplus in 8 years.

Sugar costs have plummeted over the previous three months attributable to expectations of a world sugar surplus.  On Might 22, the USDA, in its biannual report, projected that world 2025/26 sugar manufacturing would improve by +4.7% y/y to a document 189.318 million metric tons (MMT), with world sugar ending shares at 41.188 MMT, up 7.5% year-over-year.

The outlook for larger sugar manufacturing in India, the world’s second-largest producer, is bearish for costs.  On June 2, India’s Nationwide Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar manufacturing would climb +19% y/y to 35 MMT, citing bigger planted cane acreage.  The outlook for ample rainfall in India may result in a bumper sugar crop, which is bearish for costs.  On April 15, India’s Ministry of Earth Sciences projected an above-normal monsoon this yr, with complete rainfall forecast to be 105% of the long-term common.  India’s monsoon season runs from June by September.  

Indicators of bigger world sugar output are damaging for costs.  On Might 22, the USDA’s International Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a document 44.7 MMT.  Additionally, India’s 2025/26 sugar manufacturing is projected to rise +25% y/y to 35.3 MMT, citing favorable monsoon rains and elevated sugar acreage.  As well as, Thailand’s 2025/26 sugar manufacturing is predicted to climb +2% y/y to 10.3 MMT.

In a bearish issue, the Indian authorities mentioned on January 20 that it will enable its sugar mills to export 1 MMT of sugar this season, easing the restrictions positioned on sugar exports in 2023.  India has restricted sugar exports since October 2023 to take care of enough home provides.  India allowed mills to export solely 6.1 MMT of sugar in the course of the 2022/23 season to September 30, after permitting exports of a document 11.1 MMT within the earlier season.  Nonetheless, the ISMA initiatives that India’s 2024/25 sugar manufacturing will fall -17.5% y/y to a 5-year low of 26.2 MMT.  Additionally, the ISMA reported final Monday that India’s sugar manufacturing from Oct 1-Might 15 was 25.74 MMT, down -17% from the identical interval final yr.  As well as, Indian Meals Secretary Chopra mentioned on Might 1 that India’s 2024/25 sugar exports might solely complete 800,000 MT, beneath earlier expectations of 1 MMT.

The outlook for larger sugar manufacturing in Thailand is bearish for sugar costs.  On Might 2, Thailand’s Workplace of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar manufacturing rose +14% y/y to 10.00 MMT.  Thailand is the world’s third-largest sugar producer and the second-largest exporter of sugar.

Sugar costs have some assist from lowered sugar manufacturing in Brazil.  Unica reported Monday that the cumulative 2025/26 Brazil Middle-South sugar output by mid-June is down by -14.6% y/y to 9.404 MMT.  Final month, Conab, Brazil’s authorities crop forecasting company, mentioned 2024/25 Brazil sugar manufacturing fell by -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields attributable to drought and extreme warmth.  

The Worldwide Sugar Group (ISO) raised its 2024/25 world sugar deficit forecast to a 9-year excessive of -5.47 MMT on Might 15, up from a February forecast of -4.88 MMT.  This means a tightening market following the 2023/24 world sugar surplus of 1.31 MMT.  ISO additionally lower its 2024/25 world sugar manufacturing forecast to 174.8 MMT from a February forecast of 175.5 MMT.  

The USDA, in its bi-annual report launched Might 22, projected that world 2025/26 sugar manufacturing would climb +4.7% y/y to a document 189.318 MMT and that world 2025/26 human sugar consumption would improve +1.4% y/y to a document 177.921 MMT.  The USDA additionally forecasted that 2025/26 world sugar ending shares would climb +7.5% y/y to 41.188 MMT. 

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