Ample Global Sugar Supplies Continue to Weigh on Prices Through 2026

Ample supplies of sugar flooding global markets are putting sustained pressure on prices, with both New York and London futures contracts hitting multi-year lows. March NY sugar futures (SBH26) declined 0.02 points (-0.14%), while March London ICE white sugar #5 (SWH26) fell 1.60 points (-0.39%). These moves extend a week-long downtrend, as NY sugar sank to its lowest level in 2.5 months and London sugar retreated to a 5-year low—a sharp reflection of the bearish outlook for massive global supply surpluses.

India’s Surging Output and Export Expansion Drive Global Market Excess

India is emerging as a key force amplifying the global sugar glut. The India Sugar Mill Association (ISMA) reported in mid-January that India’s 2025-26 sugar output from October 1 through mid-January already reached 15.9 MMT, up 22% year-over-year. The ISMA had previously raised its full-year 2025/26 production estimate to 31 MMT in November—an 18.8% year-over-year jump from earlier forecasts—suggesting India’s ample harvests will significantly outpace prior-year levels.

Adding to the downward pressure on global prices, India’s food ministry announced plans to permit additional sugar exports to clear domestic supply surpluses. The government approved 1.5 MMT of sugar exports for the 2025/26 season, a policy shift from the export quota system India introduced in 2022/23 after late monsoon rains had constrained production. India’s role as the world’s second-largest sugar producer means its export decisions carry outsized influence on international market dynamics.

The ISMA also reduced its estimate for sugar allocated to ethanol production in India to 3.4 MMT from a prior forecast of 5 MMT, freeing up additional supply that could flow to export markets and further depress global prices.

Brazil’s Record Production Cycle Sustains the Global Surplus

Brazil, the world’s largest sugar producer, is adding to the ample supply picture. On January 21, Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through December rose 0.9% year-over-year to 40.222 MMT. More significantly, the proportion of sugarcane crushed for sugar production rose to 50.82% in 2025/26 from 48.16% in the prior year, indicating producers are prioritizing sugar over ethanol.

Brazil’s crop forecasting agency Conab raised its Brazil 2025/26 sugar production estimate to 45 MMT in early November, up from 44.5 MMT forecast previously. The USDA’s Foreign Agricultural Service projected even higher Brazil sugar production of 44.7 MMT in 2025/26—up 2.3% year-over-year and marking a record level.

However, a glimmer of price support may emerge later. Consulting firm Safras & Mercado projected that Brazil’s sugar production will decline 3.91% in 2026/27 to 41.8 MMT from the 43.5 MMT expected in 2025/26. The firm also forecast Brazil’s sugar exports would fall 11% year-over-year to 30 MMT in 2026/27, suggesting some relief from current surplus conditions could materialize.

Broad-Based Production Increases Signal Extended Period of Ample Supply

The production surge extends beyond India and Brazil. Thailand, the world’s third-largest sugar producer and second-largest exporter, is expected to expand output. The Thai Sugar Millers Corp projected Thailand’s 2025/26 sugar crop will increase 5% year-over-year to 10.5 MMT in October. The USDA’s FAS predicted a more modest 2% year-over-year increase to 10.25 MMT for the same period.

Multiple forecasting organizations have quantified the extent of the global surplus. Green Pool Commodity Specialists expects a 2.74 MMT global sugar surplus for 2025/26 and a 156,000 MT surplus for 2026/27. StoneX projects a 2.9 MMT global surplus for 2025/26. The International Sugar Organization (ISO) forecasted a 1.625 million MT surplus in 2025-26 following a 2.916 million MT deficit in 2024-25, driven by increased production in India, Thailand, and Pakistan. Covrig Analytics raised its 2025/26 global surplus estimate to 4.7 MMT, though it projects the 2026/27 surplus will moderate to 1.4 MMT as weak prices discourage further production expansion.

The USDA’s December bi-annual report underscored the magnitude of the supply challenge. The agency projected global 2025/26 sugar production would climb 4.6% year-over-year to a record 189.318 MMT, outpacing global human consumption estimated at a record 177.921 MMT (up 1.4% year-over-year). Global sugar ending stocks are expected to decline 2.9% year-over-year to 41.188 MMT—a modest drawdown given the ample production backdrop.

The FAS also predicted India’s 2025/26 sugar production would increase 25% year-over-year to 35.25 MMT, driven by favorable monsoon rains and expanded sugar acreage, reinforcing the outlook for persistent global supply pressures through 2026.