Market on Ice: Sugar’s Upside Frozen by Global Surplus Forecast

Image Source: ChemAnalyst

The global sugar market is entering mid-2025 with a clear message: while demand remains steady, the prospect of a significant global surplus is capping any major price rallies. Traders and producers alike are navigating a landscape shaped by robust production forecasts, cautious optimism, and evolving consumption patterns.

Key Highlights:

Surplus Outlook Weighs on Prices: Leading consultancies project a global sugar surplus for the 2025/26 season, with estimates ranging from 1.5 million to as much as 9.3 million tonnes, depending on weather and regional yields. This marks a sharp turnaround from the deficit seen in 2024/25 and is already reflected in subdued price movements and cautious trading sentiment.
Production Powerhouses: Brazil is set to deliver a bumper crop, with center-south output forecasted at over 42 million tonnes. India and Thailand are also expected to boost production, with India’s output projected to jump to 31.6 million tonnes and Thailand to 11.18 million tonnes, further swelling global supplies.
Market Reaction: Spot prices in Europe and the UK remain steady, as traders weigh the surplus outlook against weather uncertainties and potential policy shifts. Speculative activity is neutral to slightly bullish, but upside is clearly limited by the looming supply glut.
Consumption Concerns: The rise of GLP-1 drugs and shifting dietary habits are expected to slow global sugar consumption growth, particularly in wealthier nations, adding further pressure to prices.
Analyst Consensus: Most market watchers expect sugar prices to remain range-bound or edge lower through 2025, with any upside capped by ample supply and stable demand. Weather events or export policy changes could still trigger volatility, but the overall tone is one of cautious stability.

As the world’s top producers gear up for record harvests, the sugar market’s sweet spot may be defined more by supply discipline than by price spikes in the months ahead.

Sources: Nasdaq, CZ App, ChiniMandi, ING Think, CMBroker

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