Global Sugar Supply Surge Dampens Price Momentum for Sugar Sales

Recent market activity reveals a sharp downturn in sugar pricing as major producing regions accelerate output. March NY world sugar #11 (SBH26) closed down 0.12 points (-0.81%) on Wednesday, while March London ICE white sugar #5 (SWH26) fell 1.00 points (-0.24%), with London prices hitting a 2.5-month low. The bearish sentiment reflects mounting concerns about expanding global sugar supplies overwhelming current demand, particularly as major exporters position themselves to boost sugar sales in international markets.

Production Boom Across Major Sugar-Exporting Regions

Brazil, the world’s largest sugar producer, continues to increase output at an accelerating pace. According to Unica, Brazil’s cumulative 2025-26 Center-South sugar production through December surged 0.9% year-over-year to 40.222 million metric tons (MMT). More notably, the proportion of sugarcane crushed for sugar production rose to 50.82% in 2025/26 from 48.16% in the prior season, signaling stronger mill commitment to sugar output over ethanol.

India, the world’s second-largest producer, is ramping up production faster than anticipated. The India Sugar Mill Association (ISMA) reported that sugar output from October 1 through January 15 of the 2025-26 season increased 22% year-over-year to 15.9 MMT. In November, ISMA raised its full-year 2025/26 production estimate to 31 MMT from an earlier 30 MMT forecast, representing an 18.8% year-over-year jump. A critical development is ISMA’s downward revision of sugar allocated for ethanol production—cut from a July estimate of 5 MMT to just 3.4 MMT—a shift that frees up substantially more sugar for export markets.

Thailand, the world’s third-largest producer and second-largest exporter, is also contributing to supply expansion. The Thai Sugar Millers Corp projected that Thailand’s 2025/26 sugar crop will grow 5% year-over-year to 10.5 MMT.

Export Prospects and Quota Policy Impact on Sugar Sales

The expansion of available supply has triggered policy changes that will reshape global sugar sales patterns. India’s government signaled in November that it may permit additional sugar exports to address domestic oversupply concerns. The food ministry approved allowing mills to export 1.5 MMT of sugar in the 2025/26 season under its revised quota system. This represents a significant shift from the export restrictions India implemented in 2022/23 after production shortfalls limited domestic supplies. Greater access to export channels promises to intensify competition in international sugar sales, particularly affecting prices in traditionally price-sensitive markets.

Multiple forecasting agencies have raised production estimates for the coming season. Conab, Brazil’s government crop forecasting agency, lifted its 2025/26 Brazilian sugar production estimate to 45 MMT in November, up from an earlier 44.5 MMT projection. The USDA’s Foreign Agricultural Service (FAS) projected Brazil’s 2025/26 output at a record 44.7 MMT, up 2.3% year-over-year. For India, FAS estimated 2025/26 production at 35.25 MMT, a 25% year-over-year increase driven by favorable monsoon rains and expanded sugar acreage. Thailand’s production, according to FAS, will rise 2% year-over-year to 10.25 MMT.

The Global Sugar Surplus Challenge

Industry analysts have dramatically revised upward their global surplus forecasts. Covrig Analytics elevated its 2025/26 global sugar surplus estimate to 4.7 MMT in December, up from 4.1 MMT in October. Sugar trader Czarnikow boosted its global 2025/26 surplus estimate even more aggressively, raising it to 8.7 MMT in November—an increase of 1.2 MMT from its September forecast of 7.5 MMT.

The International Sugar Organization (ISO) forecasted a 1.625 million MT surplus for 2025-26, reversing the prior season’s 2.916 million MT deficit. ISO attributed the surplus to increased production in India, Thailand, and Pakistan, with global production projected to rise 3.2% year-over-year to 181.8 million MT.

The USDA, in its December 16 report, projected that global 2025/26 sugar production would climb 4.6% year-over-year to a record 189.318 MMT. Simultaneously, global human sugar consumption is forecast to increase just 1.4% year-over-year to 177.921 MMT—meaning production growth substantially outpaces demand expansion. The USDA also forecast that global ending stocks would decline 2.9% year-over-year, though this modest decrease masks the underlying structural surplus pressuring prices.

Market Outlook: When Will Supply Growth End?

While the near-term supply outlook remains decidedly bearish for sugar prices, there are signals suggesting the surplus may not persist indefinitely. Safras & Mercado, a Brazilian consulting firm, indicated on December 23 that Brazil’s sugar production will contract in 2026/27, falling 3.91% to 41.8 MMT from the expected 43.5 MMT in 2025/26. The firm also projects Brazil’s sugar exports will decline 11% year-over-year in 2026/27 to 30 MMT—a potentially supportive factor for prices once current surplus pressures ease.

Covrig Analytics similarly expects the 2026/27 global sugar surplus to compress to just 1.4 MMT, down sharply from current forecasts, as weak prices discourage new production investments. This contraction in future supplies could eventually provide relief to traders and buyers navigating the current environment of expanded sugar sales and competitive pricing dynamics.