Global Sugar Glut Incoming: Here's Why Prices Are Getting Hammered

Sugar markets are taking a beating, and the reason is pretty straightforward—the world is about to be swimming in it.

On Monday, the International Sugar Organization (ISO) dropped a bomb: they’re forecasting a 1.625 million MT sugar surplus for 2025-26, a complete 180 from their August prediction of a 231,000 MT deficit. That’s a massive swing, and the market didn’t like it one bit.

The Supply Shock

Where’s all this extra sugar coming from? Three countries are the culprits:

Brazil (world’s largest producer) is ramping up hard. Their crop agency Conab just raised the 2025/26 production forecast to 45 MMT—a record. Even crazier, their mills are crushing more cane for sugar than last year (46.02% vs 45.91%), and year-to-date output through October is already up +1.6% to 38.085 MMT.

India (world’s second-largest) is bouncing back strong. After a brutal 2024/25 (down to 26.1 MMT), the India Sugar Mill Association upped their 2025/26 estimate to 31 MMT (+18.8% y/y). Why? Abundant monsoon rains (8% above normal, the strongest in 5 years) plus more planted acreage. Some forecasters are even more bullish—the National Federation projects 34.9 MMT.

Thailand (third-largest, second-largest exporter) is also growing. Their Sugar Millers Corp projects 2025/26 output at 10.5 MMT (+5% y/y).

The Numbers Are Brutal

The USDA paints an even uglier picture:

• Global production expected to hit a record 189.318 MMT (+4.7% y/y)
• Global ending stocks projected to jump +7.5% to 41.188 MMT
• Consumption? Only growing +1.4%—nowhere near enough to absorb the incoming supply

Independent sugar trader Czarnikow is even more pessimistic, estimating a 8.7 MMT global surplus for 2025/26.

Any Silver Lining?

Slight relief came when India’s food ministry hinted they might increase ethanol prices, which could push mills to crush cane for ethanol instead of sugar. Also, India capped sugar exports at 1.5 MMT for 2025/26 (down from 2 MMT estimates), which would tighten supplies a bit.

But let’s be real—when you’ve got record production and growing stockpiles, these band-aids won’t move the needle much. Sugar prices are likely to stay under pressure until something gives on the supply side.