Sugar is in a downward spiral on the London and New York futures markets. Last week, prices fell to their lowest point in five years. Good sugar yields are not exclusive to Dutch beet growers.
On the New York Stock Exchange, the price of sugar fell to 14,11 US cents per pound, the lowest level since October 2020. In London, white sugar fell to $412,90 per tonne, the lowest price since December 2020.
It was a good growing season for sugar beets in the Netherlands. Due to the high sugar yields, Cosun was forced to cut back on the to reduce the allocation percentage to 90%. Looking more broadly at the sugar market, that's not such a crazy idea. The weather for sugarcane cultivation in the major growing regions of Brazil, India, and Thailand is relatively favorable. Sugarcane yields are also expected to be good there. At the same time, oil prices are under pressure, making Brazilian sugarcane processors less inclined to process sugarcane into ethanol.
Record amounts of sugar in Brazil
Brazil's Conab Institute raised its forecast for the 2025/26 sugar harvest to 45 million tons. This is a record. Sugar mills in the central-southern part of the country processed 1,3% more cane into sugar in the first half of October than a year earlier. Of the processed cane, 48,2% was used for sugar production, compared to 47,3% last year.
Market agency Datagro expects Brazil to achieve another record harvest in the 2026/27 season, with growth of almost 4%. This upward trend is putting pressure on the global market, especially now that India and Thailand are also expecting higher production.
India and Thailand increase production
India, the world's second-largest producer, raised its production forecast for 2025/26 to 31 million tons, over 18% more than the previous season. The favorable monsoon with 8% more rainfall and an expansion of sugarcane acreage are the main reasons for the good harvest. At the same time, India is reducing the amount of sugar used for ethanol production, potentially freeing up additional export volumes. Thailand, the world's third-largest producer and second-largest exporter, expects a 5% increase to 10,5 million tons of sugar in 2025/26.
Oil and ethanol are depressing demand
Falling oil prices are increasing pressure on the sugar market. In Brazil, where the choice between ethanol and sugar production depends heavily on the oil price, the current situation is encouraging sugarcane processors to produce more sugar. In India, too, lower ethanol demand is driving more sugar toward export markets.