Global Sugar Market Under Pressure: How Multi-Regional Supply Shifts Are Reshaping Prices

The global sugar market is navigating a complex landscape of rising production forecasts and shifting export dynamics. According to Barchart’s comprehensive commodity analysis platform, prices have faced sustained headwinds as producers from Brazil, India, and Thailand expand output. Recent trading activity reflects this tension: NY world sugar #11 futures closed marginally higher in early 2026, while London ICE white sugar #5 dipped to near 2.5-month lows, signaling regional divergence in market sentiment.

The Brazilian real’s recent rally to 20-month highs has become a critical factor. A stronger currency dampens export appetite among Brazil’s sugar producers, creating short-term support for prices. However, this temporary floor masks a deeper supply challenge: record production volumes are expected to flood global markets, outpacing consumption growth.

Brazil’s Record Output Signals Continued Supply Pressure

Brazil’s sugar production trajectory remains the central narrative for global prices. According to Conab, Brazil’s government crop forecasting agency, the 2025-26 season is expected to yield 45 million metric tons (MMT), surpassing earlier estimates of 44.5 MMT. This milestone represents record output, with crushing operations increasingly dedicated to sugar rather than ethanol—the ratio reached 50.82% in 2025-26 compared to 48.16% in the prior year.

Yet this record could prove short-lived. Consulting firm Safras & Mercado projected that Brazil’s 2026-27 production will contract by 3.91% to 41.8 MMT. This anticipated decline suggests the market may face structural tightness in future years, which could eventually support prices. Additionally, Brazil’s sugar exports are forecast to fall 11% year-over-year to 30 MMT in 2026-27, reducing global supply pressures.

India’s Export Surge Reshapes the Market Landscape

India’s role in the global sugar market has undergone a dramatic transformation. The India Sugar Mill Association (ISMA) reported that cumulative 2025-26 output through mid-January reached 15.9 MMT, up 22% year-over-year. For the full season, ISMA raised its production estimate to 31 MMT from an earlier forecast of 30 MMT—an 18.8% increase year-over-year.

Critically, ISMA also reduced its estimate for sugar allocated to ethanol production to 3.4 MMT from a previous forecast of 5 MMT. This shift redirects supplies toward export markets, positioning India as a key driver of global oversupply. After allowing 1.5 MMT of sugar exports in the 2025-26 season and permitting potential additional shipments to reduce domestic gluts, India’s export policy is creating fresh headwinds for prices globally.

The United States Department of Agriculture (USDA) forecasts India’s 2025-26 production at an even more bullish 35.25 MMT, up 25% year-over-year—a figure that would cement India’s status as a major market disruptor. As the world’s second-largest producer, India’s supply decisions carry outsized influence on London’s white sugar markets and New York’s raw sugar trading activity.

London Sugar Softens as Global Surplus Expands

London’s white sugar futures have borne the brunt of surplus supply concerns. The ICE white sugar #5 contract touched 2.5-month lows recently, reflecting the market’s preoccupation with rising global inventories. Multiple forecasters have raised their surplus estimates, signaling a bearish fundamental setup.

Covrig Analytics elevated its 2025-26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT previously forecast. The International Sugar Organization (ISO) projected a 1.625 million MT surplus in 2025-26 after a 2.916 million MT deficit the prior year—a dramatic swing driven by increased production in India, Thailand, and Pakistan. ISO forecasts global production will rise 3.2% year-over-year to 181.8 million MT, while consumption climbs just 1.4% to 177.921 MMT, according to USDA figures.

Sugar trader Czarnikow’s estimates prove even more bearish, raising its 2025-26 global surplus forecast to 8.7 MMT—suggesting significant downward pressure on London-traded contracts.

Thailand’s Continued Production Gains Add to Supply Weight

Thailand, the world’s third-largest sugar producer and second-largest exporter, contributes another layer of supply pressure. The Thai Sugar Millers Corp projected a 5% year-over-year increase in the 2025-26 crop to 10.5 MMT. The USDA’s Foreign Agricultural Service (FAS) issued a slightly more conservative forecast of 10.25 MMT, up 2% year-over-year. Either way, Thailand’s expanding output reinforces the surplus narrative pressuring global prices.

Market Positioning and Longer-Term Dynamics

The USDA’s December forecast painted a sobering picture for bulls. Global 2025-26 production is expected to climb 4.6% year-over-year to a record 189.318 MMT, while human consumption rises just 1.4% to 177.921 MMT. Global sugar ending stocks are forecast to fall 2.9% year-over-year to 41.188 MMT—a decline that appears modest relative to the production surge. Meanwhile, the broader commodity landscape—encompassing instruments tracked through Barchart’s news services ranging from crude oil to coffee—demonstrates how interconnected energy and agricultural pricing remain.

Looking Ahead: The 2026-27 Inflection Point

A potential inflection point emerges in 2026-27. Covrig Analytics forecasts the global surplus will compress to just 1.4 MMT as weak prices discourage production. This dynamic suggests the current bear market may plant seeds for future tightness. However, near-term pressure appears unavoidable, with London and New York both likely to experience additional downside as the market digests record harvests and elevated export availability.

The sugar market’s trajectory will hinge on whether production discipline emerges or whether global acreage remains committed to expanded crushing. Barchart’s ongoing commodity analysis indicates traders should monitor USDA crop reports, regional weather patterns, and export policy decisions—particularly from India—for clues about when oversupply conditions might begin to abate.