Crude oil drop causes sugar prices to fall due to global surplus and increased production
From Yahoo Finance: 2025-06-23 14:35:00
Sugar prices fell on Monday due to a 7% drop in crude oil prices, leading to long liquidation in sugar futures. Expectations of a global sugar surplus have pushed prices down over the past three months. Higher sugar production forecasts in India, Brazil, and Thailand are contributing to the bearish market outlook.
India’s sugar production is expected to rise by 19% in 2025/26, with favorable monsoon forecasts likely to boost crop yields. Brazil and Thailand are also projected to see increases in sugar production, adding to the downward pressure on prices. The Indian government has eased restrictions on sugar exports, further impacting global supplies.
Thailand reported a 14% increase in sugar production for 2024/25, contributing to the oversupply of sugar in the market. However, Pakistan’s plan to import 250,000 metric tons of raw sugar could provide some support to prices. Reduced sugar production in Brazil is also helping to keep prices from falling further.
The International Sugar Organization predicts a global sugar deficit for 2024/25, tightening the market after a surplus in the previous year. The USDA’s forecasts indicate record sugar production and consumption for 2025/26, with ending stocks expected to increase. These factors are influencing the current state of the sugar market.