Sugar Market Stuck in a Holding Pattern—Here's Why

Sugar prices are treading water after a brief rally. NY March futures are up just 0.34% today, with London white sugar gaining 0.60%, as traders lock in short-term profits ahead of the weekend.

The bigger picture? Sugar is fighting a supply war it’s losing. Global production is set to explode—the USDA projects a record 189.3 million MT for 2025/26, while demand only rises 1.4% y/y. That’s a recipe for a glut.

Brazil’s crushing the competition (literally). Output could hit a record 44.7 MMT, and mills are prioritizing sugar over ethanol. India’s bumper crop—forecast at 35.3 MMT after last year’s drought—is also weighing on prices. Even Thailand is ramping up 2% y/y.

Some support is there: India’s ethanol boost could divert more cane away from sugar, and export quotas are tightening. But the weakness in Brazil’s real against the dollar is pushing exporters to sell more, undercutting upside.

Bottom line: Until supply fears ease, expect sugar to consolidate near recent lows. The macro setup screams oversupply for the next 12 months.