Global Sugar Market at Crossroads: Quantitative Data Reveals Production Surge Offsetting Real-Backed Support

The week closing saw mixed signals in the sugar complex, with March New York contracts settling +0.07 (+0.46%) near 5-week highs, while London ICE white sugar #5 retreated -1.00 (-0.23%). Underneath these modest price moves lies a fundamental tension reshaping the market narrative.

Currency Tailwinds Meet Supply Headwinds

The strength of quantitative research in commodity markets becomes apparent when analyzing currency dynamics. Brazil’s real appreciation to 1-week highs against the dollar creates near-term price support by dampening export incentives for producers—a textbook example of how exchange rate mechanics directly influence global agricultural commodity flows. However, this micro-level friction masks deeper structural bearish forces.

StoneX’s recent downward revision of Brazil’s 2026/27 Center-South production to 41.5 MMT (from September’s 42.1 MMT estimate) provided temporary cushion, yet the broader picture paints a different story: Conab raised its 2025/26 Brazil sugar output forecast to 45 MMT, with October data showing a +16.4% year-over-year surge in Center-South crushing volumes to 2.068 MT. Cumulative 2025-26 output through October reached 38.085 MMT, up +1.6% annually.

India’s Production Explosion Reshapes Trade Dynamics

India’s narrative shifted dramatically when the Sugar Mill Association raised its 2025/26 production estimate to 31 MMT (up +18.8% y/y from 30 MMT previously). More significantly, reduced ethanol crushing projections—slashed to 3.4 MMT from July’s 5 MMT forecast—now liberate production for export markets. With monsoon rainfall running 8% above the 5-year average at 937.2 mm, and the National Federation projecting production could reach 34.9 MMT (+19% y/y), export volumes face upward pressure despite government quota limits of 1.5 MMT for 2025/26.

A Perfect Supply Storm Takes Shape

Thailand, the world’s third-largest producer and second-largest exporter, contributes its own volume expansion. The Thai Sugar Millers Corp projects a +5% y/y increase to 10.5 MMT for 2025/26, building on 2024/25’s +14% y/y jump to 10.00 MMT.

The International Sugar Organization’s latest surplus forecast of 1.625 million MT for 2025-26 (reversing a 2.916 million MT deficit the prior year) reflects these production realities. More aggressively, Czarnikow boosted its global surplus estimate to 8.7 MMT for 2025/26, a +1.2 MMT upward revision from September projections. USDA forecasting anticipates global production climbing +4.7% y/y to a record 189.318 MMT against consumption growth of only +1.4% y/y to 177.921 MMT, with ending stocks expanding +7.5% y/y to 41.188 MMT.

FAS projections underpin these concerns: Brazil’s 2025/26 output rising +2.3% y/y to 44.7 MMT, India accelerating +25% y/y to 35.3 MMT on monsoon tailwinds and expanded acreage, and Thailand advancing +2% y/y to 10.3 MMT.

The Path Forward

Currency support from Brazilian real appreciation provides tactical relief, and India’s ethanol policy deliberations inject uncertainty into export trajectories. Yet the strength of quantitative research in mapping production capacity across multiple origins suggests supply-side gravitational forces will likely overwhelm near-term currency effects. The November 13 London 4.75-year low and November 6 New York 5-year low represent watershed moments reflecting this structural reassessment.