Sugar prices fell on Wednesday after reaching 3.5-week highs due to a drop in crude oil prices, prompting long liquidation in sugar futures. WTI crude oil prices plummeted over 2%, impacting ethanol prices and potentially leading to increased sugar production. The International Sugar Organization predicts a 1.625 million MT surplus in 2025-26, driven by higher sugar production in India, Thailand, and Pakistan.

India’s food ministry may raise ethanol prices for gasoline blending, encouraging sugar mills to prioritize ethanol production over sugar. Despite a previously forecasted sugar deficit, the International Sugar Organization now anticipates a surplus in the 2025-26 marketing year, with a 3.2% increase in global sugar production to 181.8 million MT. India plans to export 1.5 MMT of sugar in 2025-26, less than earlier estimates.

The global sugar surplus is affecting prices, with Brazil expecting record sugar output in 2025-26, contributing to lower prices. Brazil’s sugar production estimate was raised to 45 MMT, while India’s production forecast was increased to 31 MMT. India’s potential for higher sugar exports due to favorable weather conditions may further impact global sugar prices negatively.

Thailand also projects an increase in sugar production, with a 5% rise expected in the 2025-26 season. The USDA forecasts record global sugar production in 2025-26, with Brazil and India leading the way in increased output. This surplus is likely to continue to impact sugar prices worldwide.

Read more at Yahoo Finance: Sugar Prices Erase Early Gains as Crude Oil Tumbles