Sugar prices closed higher on Wednesday, recovering from 1-week lows due to year-end fund short covering. This comes after the dollar index rose to a 1-week high earlier in the day, putting pressure on most commodity prices, including sugar. March NY sugar hit a 2.25-month high on Monday, boosted by expectations of smaller future sugar supplies from Brazil. Brazil’s 2026/27 sugar production is expected to fall by -3.91% to 41.8 MMT, with exports predicted to drop by -11% y/y to 30 MMT.

India’s sugar production for 2025-26 is on the rise, with the India Sugar Mill Association reporting a 24% y/y increase to 11.83 MMT from October 1 to December 31. This increase in production may lead to higher sugar exports from India, as the country looks to reduce a domestic supply glut. On the other hand, the outlook for record sugar output in Brazil is bearish for prices, as Conab raised its production estimate to 45 MMT for 2025/26.

The International Sugar Organization (ISO) forecasts a 1.625 million MT sugar surplus in 2025-26, following a deficit in the previous year. The surplus is expected due to increased sugar production in India, Thailand, and Pakistan. The USDA projects a global 2025/26 sugar production increase and a rise in human sugar consumption, with global sugar ending stocks expected to fall. Thailand’s 2025/26 sugar crop is projected to increase by +5% y/y to 10.5 MMT.

The USDA’s bi-annual report released on December 16 predicts a record global sugar production in 2025/26, with Brazil and India both expected to see significant increases in sugar production. Thailand, the third-largest sugar producer and second-largest exporter, is also forecasted to see a rise in sugar crop production. The outlook for sugar prices remains bearish due to the expected increase in production globally.

Read more at Yahoo Finance: Year-End Short Covering Boosts Sugar Prices