Sugar Prices Fall on the Outlook for Ample Global Supplies

May NY world sugar #11 (SBK26) on Friday closed down -0.11 (-1.22%), and May London ICE white sugar #5 (SWK26) closed down -1.30 (-0.31%).

Sugar prices remain weak as they continued their week-long slide on Friday, with NY sugar falling to a 5-week low and London sugar posting a 4-week low.  Signs of abundant global sugar supplies are weighing on prices.  On Tuesday, India’s Food Secretary said the government has no plans to ban sugar exports this year, easing concerns that it could divert more sugar to make ethanol following the Iran war disruption to crude oil supplies.

Sugar prices are also under pressure from last Thursday when India’s National Federation of Cooperative Sugar Factories Ltd. reported that India’s 2025-26 sugar output from Oct 1-Mar 31 was up +9% y/y to 27.12 MMT.

Higher sugar production in Brazil is also bearish for sugar prices.  On March 27, Unica reported that cumulative 2025-26 Center-South sugar output (October through mid-March) is up +0.7% y/y to 40.25 MMT, with sugar mills boosting the amount of cane crushed for sugar to 50.61% from 48.08% last year.

Last Monday, NY sugar rallied to a 5.75-month high, and London sugar climbed to a 6.25-month high, driven by strength in crude oil prices.  Crude oil surged to a 3.75-year high last month, boosting ethanol prices and potentially encouraging the world’s sugar mills to increase ethanol production and curb sugar output.

Sugar prices also have some support amid supply disruptions from the closure of the Strait of Hormuz.  According to Covrig Analytics, the closure of the strait has curbed approximately 6% of the world’s sugar trade, constraining refined sugar output.

Last month, sugar prices plunged to 5.5-year nearest-futures lows on concern that a global sugar surplus will persist.  On February 11, analysts from sugar trader Czarnikow said they expect a global sugar surplus of 3.4 MMT in the 2026/27 crop year, following an 8.3 MMT surplus in 2025/26.   Also, Green Pool Commodity Specialists said on January 29 that they expect a global sugar surplus of 2.74 MMT for 2025/26 and 156,000 MT for 2026/27.  Meanwhile, StoneX said February 13 that it expects a global sugar surplus of 2.9 MMT in 2025/26.