World sugar prices have declined by 51% over the past two years, with the nearby price falling from a 12-year high of 28.14 in November 2023 to 13.67 by February 2026.
Global production recovered after drought and extreme heat caused problems in certain growing areas in 2023. A key driver in the selloff has been a global production surplus this marketing year. After falling to deficit in 2024/25, global production is forecast to exceed global consumption for the 2025/26 marketing year, which runs from October through September.
As prices have declined, funds have accumulated a record net short position. This leaves fewer sellers waiting in the wings and leaves the market vulnerable to a short covering rally if market perceptions change. As of February 17, 2026, managed money traders were net short 241,777 contracts in the ICE Sugar No. 11 contract, the largest on record. .
The Global Surplus is likely to shrink in 2026/27.
Early forecasts are calling for a surplus of 156,000 to 4.4 million metric tons, which would be down from 1.2 to 6.7 million currently estimated for 2025/26. Analysts are expecting low prices to spark disinvestment in cane production, fewer beet plantings, and a movement towards more ethanol production in cane crushing activity in the next growing season. Early forecasts have EU beet planting dropping 4% to 7% this year.
Monthly Nearby Sugar #11
Excessive rainfall has reduced expectations for India’s 2025/26 output.
In late February, the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) put their forecast at 29.3 million tons, down from a forecast of 30.95 million previously but up from 26-28 million in 2024/25. Cane yields are down across all the main producing states, from Maharashtra and Karnataka to Uttar Pradesh and Gujarat.
Reduced rainfall from the 2023/24 El Niño event damaged India’s 2024/25
crop. That was one of the five strongest El Niño events on record and it ushered in extreme heat as well as reduced rainfall in India. India’s 2023 monsoon rainfall was below normal, and that August was the driest and warmest since 1901. 2024 was the hottest year on record for India as well.
Climate forecasters expected El Niño to return in 2026, but not until late summer or fall.
As of February 2026, the current La Niña event was transitioning to an ENSO-neutral phase. The US Climate Prediction Center has put the likelihood for neutral conditions to continue through the Northern Hemisphere summer at 56%. This leaves a better than even chance that El Niño will not interfere with India’s monsoon. However, it is
ICE Sugar #11 - Managed Money Position
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Source: CQG Most Recent: -241,063 as of Feb 24, 2026
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9 | ADMISI - The Ghost In The Machine | Q1 Edition 2026
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