Sugar prices tumbled to their lowest levels in over five years as mounting global surpluses crushed market sentiment. March New York world sugar #11 futures fell -1.98% while London ICE white sugar #5 dropped -2.794% Wednesday, extending a three-month selloff.

Analysts are projecting record global sugar surpluses, with sugar trader Czarnikow forecasting a 3.4 million metric ton surplus for 2026/27 following an 8.3 MMT surplus in 2025/26. Green Pool Commodity Specialists expects a 2.74 MMT surplus for 2025/26, while StoneX projects a 2.9 MMT surplus. Brazil's Center-South sugar output through mid-January reached 40.236 MMT, up 0.9% year-over-year, with cane crushed for sugar rising to 50.78% from 48.15% last season.

India's sugar production surge adds to bearish pressure, with output from October 1 through January 15 up 22% year-over-year to 15.9 MMT. The country's food ministry may permit additional exports to reduce domestic supply gluts, potentially boosting global availability. With multiple agencies projecting record production from Brazil, India, and Thailand, and funds holding record short positions, sugar prices face continued downward pressure as supply overwhelms demand.