Global Sugar Production Surge Undercuts Prices Amid Rising Export Pressure

Sugar markets are facing renewed headwinds as multiple production forecasts point to a global glut. March New York world sugar #11 futures declined 0.15 points (down 1.01%), while March London ICE white sugar #5 fell 3.70 points (down 0.90%), with London prices reaching 2.5-month lows. The selloff reflects a structural shift in global supply dynamics, where output growth across major producing nations undercuts prices and threatens to extend weakness into 2026.

Multiple Producers Increase Output in 2025-26

Brazil’s sugar sector is on track for record production. Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through December rose 0.9% year-over-year to 40.222 million metric tons (MMT). More significantly, Brazilian mills are shifting their crush ratios toward sugar production, with the cane crushed for sugar climbing to 50.82% in 2025-26 from 48.16% in 2024-25—a decision that prioritizes volume over ethanol production.

India’s sugar harvest has exceeded expectations, adding pressure on the global market. The India Sugar Mill Association (ISMA) reported that India’s 2025-26 sugar output from October 1 through January 15 surged 22% year-over-year to 15.9 MMT. More striking, ISMA raised its full-season 2025-26 production estimate to 31 MMT in November from an earlier 30 MMT forecast—representing an 18.8% year-over-year increase. This production windfall positions India to boost sugar exports, as ISMA simultaneously cut its ethanol-use estimate to 3.4 MMT from a July forecast of 5 MMT.

Thailand, the world’s third-largest producer and second-largest exporter, is also ramping up output. The Thai Sugar Millers Corp projected that Thailand’s 2025-26 sugar crop will increase 5% year-over-year to 10.5 MMT, signaling continued export availability from Southeast Asia.

India Export Push Weighs on Price Outlook

Policy decisions in New Delhi are reshaping global supply flows. India’s food ministry announced it would allow mills to export 1.5 MMT of sugar in the 2025-26 season, a reversal from the quota system introduced in 2022-23 following production shortfalls. This export opening comes as India seeks to reduce a domestic supply glut, directly undercuts prices by channeling excess production into world markets.

The ripple effect is substantial: sugar trader Czarnikow boosted its global 2025-26 sugar surplus estimate to 8.7 MMT in November, up from a September estimate of 7.5 MMT. Multiple forecasters now project meaningful oversupply. Covrig Analytics raised its 2025-26 global sugar surplus to 4.7 MMT in December from 4.1 MMT in October. The International Sugar Organization (ISO) forecast a 1.625 million MT surplus in 2025-26, driven by increased production in India, Thailand, and Pakistan—a sharp reversal from the 2.916 million MT deficit in 2024-25.

Global Surplus Forecast Points to Continued Price Pressure

The USDA provided the most comprehensive outlook in its December 16 bi-annual report, projecting global 2025-26 sugar production would climb 4.6% year-over-year to a record 189.318 MMT. Against this supply surge, global human consumption is expected to grow a modest 1.4% year-over-year to 177.921 MMT. The math is sobering for prices: global sugar ending stocks are forecast to fall only 2.9% year-over-year to 41.188 MMT—barely keeping pace with production growth.

The USDA’s regional breakdowns reinforce the supply overhang. Brazil’s 2025-26 production is forecast to rise 2.3% year-over-year to a record 44.7 MMT. India’s output is projected to increase 25% year-over-year to 35.25 MMT, bolstered by favorable monsoon rains and expanded sugar acreage. Thailand is seen adding 2% year-over-year to reach 10.25 MMT.

There is a silver lining for prices embedded in the data. Consulting firm Safras & Mercado projected that Brazil’s sugar production in 2026-27 will decline 3.91% to 41.8 MMT from 43.5 MMT expected in 2025-26, as weak prices discourage planting. Similarly, Covrig Analytics expects the 2026-27 global sugar surplus to contract sharply to 1.4 MMT. However, this structural relief remains distant; for now, the near-term outlook remains pressured by current-year production gains that undercut the market through 2025-26.