Global Sugar Glut Deepens as Major Producers Ramp Up Output

Sugar markets took another hit today, with NY March futures dropping -0.07 (-0.48%) to hit 1-month lows, while London ICE white sugar fell -1.40 (-0.33%) to 2-month lows. The culprit? A perfect storm of surging production across the world’s top sugar-producing regions.

India’s Surge Floods the Market

India’s sugar output is the main headwind right now. The National Federation of Cooperative Sugar Factories reported today that India’s 2025/26 sugar output climbed to 15.9 MMT from Oct 1-Jan 15—a hefty +21% year-over-year jump. That’s not all. The India Sugar Mill Association raised its full-season production estimate to 31 MMT in November, up +18.8% y/y from 30 MMT earlier. This surge matters because India is the world’s second-largest producer and is now looking to export more sugar domestically stored.

The government’s move to allow additional sugar exports through a 1.5 MMT quota is adding fuel to the fire. India’s food secretary signaled that mills could push out even more sugar to ease the domestic glut, which is weighing heavily on global prices. Even Pakistan and other regional markets are feeling the pressure from India’s export appetite.

Brazil Maintains Its Dominance

Brazil isn’t slowing down either. Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through mid-December rose +0.9% y/y to 40.158 MMT, with crush-for-sugar ratios climbing to 50.91% in 2025/26 from 48.19% the year prior. Conab, Brazil’s crop agency, raised its 2025/26 sugar production estimate to 45 MMT in November.

The USDA’s Foreign Agricultural Service projects Brazil will hit a record 44.7 MMT in 2025/26, up +2.3% y/y. These numbers underscore Brazil’s role in keeping global supplies abundant and prices suppressed.

Thailand’s Third-Act Production Boost

Thailand, the world’s third-largest sugar producer and second-largest exporter, isn’t sitting idle. The Thai Sugar Millers Corp projected October 1 that Thailand’s 2025/26 sugar crop will jump +5% y/y to 10.5 MMT. The USDA also forecasts Thailand at 10.25 MMT, up +2% y/y.

The Surplus Scenario Dominates

The cumulative effect? Global oversupply. Covrig Analytics raised its 2025/26 global sugar surplus estimate to 4.7 MMT in January, up from 4.1 MMT in October. The International Sugar Organization pegged a 1.625 million MT surplus for 2025-26, while sugar trader Czarnikow boosted its estimate to 8.7 MMT—the highest in the pack.

The USDA’s bi-annual report projected that global 2025/26 sugar production would climb +4.6% y/y to a record 189.318 MMT, while consumption increases only +1.4% y/y to 177.921 MMT. That gap is the real story. Global ending stocks are also expected to fall by -2.9% y/y to 41.188 MMT, though that’s more of a technical adjustment than a supply relief.

The Silver Lining

Not all news is bearish. Safras & Mercado, a consulting firm, expects Brazil’s sugar production to decline -3.91% in 2026/27 to 41.8 MMT from 43.5 MMT in 2025/26. Brazil’s sugar exports are also projected to fall -11% y/y to 30 MMT in 2026/27. This pullback could provide some price support down the line, suggesting the current glut may be temporary.

Bottom Line

Sugar’s near-term outlook remains under pressure from booming production in India, Brazil, and Thailand, all contributing to a global oversupply scenario. While the FAS expects India’s 2025/26 production to hit 35.25 MMT—a +25% y/y surge driven by monsoon rains and expanded acreage—prices will likely stay depressed until supply dynamics shift. The key to watch: whether India’s expanded exports can absorb excess supplies, or if the glut continues pressuring markets globally, including developing regions like Pakistan.