Just been checking the sugar charts and it's pretty clear why prices have been stuck in a rut lately. Both NY and London contracts closed lower again on Thursday, with NY hitting 2-week lows. The real issue is that global sugar production is expected to keep outpacing demand for the next couple of years, which is basically capping any rally attempts.

What caught my attention is how much the supply picture has shifted. Back in February, analysts were already calling for a 3.4 MMT surplus in 2026/27 after an 8.3 MMT surplus in 2025/26. The USDA is projecting global sugar production will hit a record 189.3 MMT this year, way above consumption forecasts. That kind of structural oversupply is tough to fight through.

The regional breakdown is interesting though. India's output is surging - they just approved another 500,000 MT for export on top of existing quotas, and their sugar production is up 12% year-over-year. Thailand's also ramping up production. But here's where it gets nuanced: Brazil, which is usually the swing producer, might actually see output decline in 2026/27. Their sugar production is expected to drop about 3.9% next year. Still, cumulative output through January is holding up okay.

One thing providing some support is crude oil prices spiking higher recently. When oil rallies, it makes ethanol more attractive, which could push some sugar mills to shift their cane crushing toward ethanol instead of sugar. That would help tighten sugar supply on the margin. But honestly, with all these production forecasts pointing higher, it's hard to see prices breaking out anytime soon unless something disrupts these projections.