March 25, 2026 — Sugar futures fell in recent trading, pressured by a sharp decline in crude oil prices and forecasts for robust global production. The downturn reflects a shift in market dynamics as increased supplies from major producers like India and Brazil converge with weaker energy markets.
Market Pressure from Energy and Ethanol
March New York world sugar and London ICE white sugar futures closed lower. Analysts linked the move directly to a plunge in crude oil prices, with West Texas Intermediate crude hitting a multi-week low. Lower oil prices undermine ethanol values, potentially influencing sugar mills to allocate more cane crushing toward sugar production instead of biofuel. This shift can increase sugar supplies on the global market.
Prices had already retreated to multi-week lows earlier in the month. The bearish momentum was fueled by accelerated production reports from key origins.
Record Output Forecasts from Major Producers
Production data from India has been a significant factor. The India Sugar Mills Association (ISMA) reported that sugar production for October-November jumped 43% year-over-year. The number of mills crushing cane was also higher than the previous season. ISMA subsequently raised its full 2025/26 India sugar production estimate to 31 million metric tons, an increase of nearly 19% from the prior year.
Furthermore, ISMA reduced its estimate for sugar diverted to ethanol production. This adjustment suggests more sugar could be available for export, adding to global supplies.
In Brazil, the world’s largest producer, the outlook is similarly ample. Conab, Brazil’s crop agency, raised its 2025/26 sugar production estimate. Cumulative sugar output in the Center-South region through mid-November showed a year-over-year increase. The USDA’s Foreign Agricultural Service also predicted Brazil would produce a record sugar crop.
Global Surplus Projections
The International Sugar Organization (ISO) revised its forecast for the 2025-26 marketing year, projecting a global sugar surplus. This marks a sharp reversal from its earlier forecast of a deficit and the confirmed deficit for the 2024-25 season. The ISO attributed the expected surplus to increased production in India, Thailand, and Pakistan.
Commercial trader Czarnikow also increased its estimate for the global sugar surplus. These projections have weighed on prices since last fall, with both New York and London futures touching multi-year lows in November.
Thailand and USDA Data
Adding to the supply outlook, the Thai Sugar Millers Corp projected Thailand’s 2025/26 sugar crop would increase. Thailand is a major global exporter.
The U.S. Department of Agriculture, in a major report, projected global 2025/26 sugar production would climb to a record high. It also forecast record human consumption and a rise in global ending stocks. The USDA’s estimates for production in Brazil, India, and Thailand all pointed to higher output.
What’s Next for Sugar Markets
Market attention will now focus on several factors. The pace of exports from India, following its government’s announced export quota, will be closely watched. Weather conditions in key growing regions during the remainder of the season could also impact final production figures. Finally, the trajectory of crude oil prices will continue to influence the economic balance between sugar and ethanol production in Brazil. The current market sentiment remains cautious due to the prevailing forecasts for ample supply.
For official crop reports, see the U.S. Department of Agriculture website. Market data and futures prices are available from ICE Futures.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
