Global Sugar Price Under Pressure as Major Producers Ramp Up Output

Sugar price dynamics in early 2026 continue to reflect an oversupplied market landscape. March NY world sugar #11 futures rose +0.06 points (+0.41%) while March London ICE white sugar #5 contracts fell -4.70 points (-1.12%), signaling divergent regional sentiment. The fundamental driver remains straightforward: major producing nations have significantly increased output, putting sustained downward pressure on sugar price across both trading centers. With the weakening dollar providing some support to NY contracts, the broader narrative is one of abundant supply overwhelming demand fundamentals.

Production Surge: The Core Pressure on Sugar Price

The projected 2025/26 global sugar output tells the story of a market drowning in excess inventory. The USDA’s December forecast predicted global production would climb to a record 189.318 million metric tons (MMT), representing a +4.6% year-over-year increase, while consumption would grow only +1.4% to 177.921 MMT. This significant production-consumption gap is the primary reason sugar price remains weak.

Brazil, as the world’s largest producer, is expected to deliver record volumes. Conab raised its 2025/26 output forecast to 45 MMT (up from 44.5 MMT), while the USDA’s Foreign Agricultural Service projected an even higher 44.7 MMT with a +2.3% year-over-year increase. Meanwhile, sugar cane crushing ratios shifted toward sugar production rather than ethanol, amplifying output. Unica reported that Brazil’s Center-South region’s cumulative 2025/26 production reached 40.222 MMT through December, up +0.9% year-over-year, with the sugar cane crush ratio rising to 50.82%.

India presents an even more dramatic supply expansion story. The India Sugar Mill Association reported production from October 1 through January 15 totaled 15.9 MMT, a +22% surge year-over-year. ISMA subsequently revised its full-year 2025/26 estimate to 31 MMT (up from 30 MMT), representing an +18.8% annual increase. The USDA projects even higher production at 35.25 MMT, driven by favorable monsoon rains and expanded planting. Critically, ISMA cut its ethanol usage estimate to 3.4 MMT from 5 MMT, potentially freeing additional supplies for export, which directly impacts sugar price through increased competition in global markets.

The Export Wildcard: India’s Market Impact

India’s emerging willingness to export surplus production represents a major downside factor for sugar price. After implementing a quota system in 2022/23, India’s food ministry announced it would allow mills to export 1.5 MMT in the 2025/26 season. This policy shift, coming on the heels of reports that the government may permit additional exports to tackle domestic oversupply, has pressured sugar price expectations throughout the market.

Thailand rounds out the production story as the world’s third-largest producer and second-largest exporter. The Thai Sugar Millers Corp projected 2025/26 output would increase +5% year-over-year to 10.5 MMT, while the USDA estimated +2% growth to 10.25 MMT. Combined with Pakistan’s increased production, the concentration of supply growth in export-oriented producers weighs heavily on sugar price forecasts.

Competing Surplus Forecasts Highlight Market Uncertainty

Multiple analysis organizations have issued varying surplus projections, yet all point to significant downward pressure on sugar price. The International Sugar Organization forecasted a 1.625 million MT surplus for 2025-26 (following a 2.916 million MT deficit the prior year), driven by increased production in India, Thailand, and Pakistan. Covrig Analytics raised its surplus estimate to 4.7 MMT from 4.1 MMT, while sugar trader Czarnikow boosted its projection to 8.7 MMT, up 1.2 MMT from its September estimate.

These divergent forecasts underscore the challenge in pricing sugar price: while near-term supply is undeniably heavy, medium-term dynamics offer some relief. Covrig projects the 2026/27 surplus will contract to just 1.4 MMT as weak prices discourage further production expansion. Similarly, Safras & Mercado forecast Brazil’s sugar production will decline -3.91% in 2026/27 to 41.8 MMT, with exports falling -11% year-over-year to 30 MMT.

Looking Ahead: When Will Sugar Price Find Support?

The current weakness in sugar price reflects rational market fundamentals: record global supply meeting below-trend demand growth. Global ending stocks are projected to total 41.188 MMT in 2025/26, down just -2.9% year-over-year, providing ample supply cushion. However, the market is not without supportive signals. The anticipated production contraction in 2026/27 and the cyclical nature of commodity markets suggest sugar price eventually stabilize once the current production cycle matures. Until then, traders monitoring these contracts should expect continued pressure on sugar price from this oversupplied environment, with relief likely emerging only as production incentives weaken and supply dynamics rebalance.