Global Sugar Surplus Alert: ISO Flips Forecast, Prices Hit Multi-Year Lows

Sugar is getting hammered. NY March futures down 1.07% today, London white sugar sliding 1.81%—and the culprit? The International Sugar Organization just dropped a bomb: they’re now forecasting a 1.625 million MT surplus in 2025-26, completely reversing their August call for a deficit. That’s a massive 1.856 million MT swing.

The Surplus Story: Who’s Flooding the Market?

India, Thailand, and Pakistan are ramping up production, but India’s the main story. The Indian Sugar Mill Association bumped their 2025/26 estimate to 31 MMT (+18.8% YoY), rebounding hard after last year’s 5-year low of 26.1 MMT. Even better weather is helping—monsoon rainfall hit 937.2mm through September, 8% above normal (strongest in 5 years).

Brazil isn’t slowing down either. Conab raised their 2025/26 forecast to 45 MMT. Center-South output in late October jumped 16.4% YoY, and mills are crushing more cane specifically for sugar (46.02% vs 45.91% last year). Thailand’s ramping 5% to 10.5 MMT.

The Numbers Are Brutal

ISO’s forecasting +3.2% YoY in global sugar production to 181.8 MMT. Private trader Czarnikow went even harder—they bumped their 2025/26 surplus estimate to 8.7 MMT in November (up 1.2 MMT from September). USDA projects global output hits a record 189.3 MMT, while consumption only grows 1.4% to 177.9 MMT. Ending stocks? Up 7.5% to 41.2 MMT.

The kicker: India’s cutting its ethanol allocation from 5 MMT to 3.4 MMT, freeing up more sugar for exports.

Where’s the Bottom?

Sugar just posted a 5-year low in NY and 4.75-year low in London. With all this supply coming online and India finally getting good weather + bumper crops, the downside pressure isn’t done yet. Price action screams oversupply story.