Global sugar prices have fallen to their lowest levels since 2021 as favorable weather restored production in Brazil and India, ending a two-year period of tight supplies.

Raw sugar futures on the Intercontinental Exchange traded at 15.46 cents per pound in mid-September, down 24% from last year's peak. European prices fell further, dropping 37% from €844 per tonne in October 2023 to €534 in July.

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The Food and Agriculture Organization's sugar price index is also down to 99.4 in September, the lowest reading since March 2021 and below the 2014-2016 baseline average of 100.

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The decline reverses sharp price increases in 2023, when drought in both countries forced India to ban exports and reduced Brazilian output. At that time, importers competed for limited supplies and futures exceeded 20 cents per pound.

A return to normal weather patterns and last year's high prices are behind the recovery in the world’s two largest producers.

This year, Brazil's main growing region reported 62% fewer fires between January and August compared to the same period last year, while improved rainfall supported crop development. India received above-normal monsoon rainfall in both 2024 and 2025, replenishing groundwater and boosting yields.

The production recovery has been substantial. Brazil is expected to export 35.7 million tonnes in marketing year 2025/26, while India has authorized 4.5 million tonnes of exports after lifting its two-year ban.

Together they are supplying approximately 40 million tonnes -- nearly half of global trade.

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Meanwhile, the weak Brazilian real has reinforced the country's competitive position, as local currency revenues remain relatively stable even as dollar-denominated prices decline.

Immediate pressure has been felt by Thailand, traditionally the world's third-largest exporter.

The country forecasts exports will fall 30% to 7 million tonnes in 2025/26 from 10 million tonnes this year, citing "renewed competition from India and Brazil" that has put "downward pressure on current world sugar prices," according to government reports.

Thailand also lost a major buyer when China banned imports of Thai sugar syrup in December 2024, causing domestic consumption to fall 18%.

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Other medium-sized players are also struggling amid the rapidly changing supply picture.

Australia, another major exporter, revised up its own production for 2025/26 from 3.8 million tonnes to 4 million tonnes. However, it has been unable to capitalize from increased supply citing "relatively soft global sugar market conditions" with "little urgency for buyers to secure imports," leading the country to increase stocks rather than push overseas sales.

Meanwhile, South African producers – who are forecast to produce 2.05 million tonnes in 2025/26, up 6% from 1.94 million tonnes – face a double whammy of a 30% US tariff on its small 24,744-tonne import quota to the country and surging imports.

South Africa’s refined sugar imports increased by 486% between May and July as cheaper Brazilian, Guatemalan and Thai sugar undercut local producers despite a $210-per-tonne import tariff.

Even countries facing production shortfalls are refusing imports. Turkey suspended duty-free sugar imports in May to protect domestic producers from oversupply of domestic sugar, despite production declining to 2.9 million tonnes due to adverse weather.

"Market futures indicate ample global supply with little urgency for buyers to secure imports," according to USDA assessments, with prices expected to trade below the 10-year average over the next 18 months.