Global Sugar Output Rose Despite Market Pressures From Persistent Oversupply

Global sugar markets faced continued downward pressure in recent trading sessions as persistent oversupply outlook weighed on prices. March NY sugar fell on recent market weakness, while London ICE white sugar also declined amid broader concerns over global production capacity. The fundamental issue driving prices lower is straightforward: multiple major producing regions have boosted output, creating a structural oversupply situation that analysts expect to persist through the 2026/27 crop cycle.

Major commodity analysts have recalibrated their global sugar surplus estimates upward multiple times in recent months. Czarnikow, a leading sugar trader, anticipates a global surplus of 3.4 MMT in 2026/27 following an 8.3 MMT surplus in 2025/26. This projection reflects a market flooded with production that cannot find adequate demand. Alternative forecasts reveal similar bearish conditions: Green Pool Commodity Specialists projects a 2.74 MMT global surplus for 2025/26, while StoneX estimates a 2.9 MMT surplus. Even more concerning for price support, Covrig Analytics raised its 2025/26 surplus estimate to 4.7 MMT, indicating deepening market oversupply in the near term.

Record Production Estimates Drive Sugar Oversupply

Brazil maintains its position as the world’s leading sugar producer, and rising production there amplifies supply concerns. Brazil’s cumulative 2025-26 Center-South sugar output through December rose 0.9% year-over-year to 40.222 MMT, with the ratio of cane crushed for sugar increasing to 50.82%. Brazil’s crop forecasting agency, Conab, raised its 2025/26 sugar production estimate to 45 MMT, representing record output levels. Safras & Mercado consulting firm, however, projected that Brazil’s production will decline in 2026/27 to 41.8 MMT from 43.5 MMT expected in 2025/26, suggesting future supply relief.

India, the world’s second-largest sugar producer, has emerged as a major driver of current oversupply. The India Sugar Mill Association reported that India’s 2025-26 sugar output from October through mid-January surged 22% year-over-year to 15.9 MMT. Earlier in the season, ISMA raised its 2025/26 India sugar production estimate to 31 MMT from 30 MMT, representing an 18.8% year-over-year increase. A critical policy shift has further complicated the market: the Indian government permitted additional sugar exports to reduce domestic supply glut, and the food ministry approved mills to export 1.5 MMT in the 2025/26 season. Notably, ISMA reduced its estimate for sugar used in ethanol production to 3.4 MMT from 5 MMT, freeing up additional supply for export markets and further depressing international prices.

Thailand, the world’s third-largest sugar producer and second-largest exporter, continues expanding capacity. The Thai Sugar Millers Corporation projected that Thailand’s 2025/26 sugar crop will increase 5% year-over-year to 10.5 MMT, adding significant volume to global markets.

Global Surplus Forecasts Signal Continued Bearish Pressure

The International Sugar Organization on November 17 forecast a 1.625 million MT sugar surplus in 2025-26, driven by increased production in India, Thailand, and Pakistan. ISO’s forecast showed global sugar production climbing 3.2% year-over-year to 181.8 million MT in 2025-26, while human consumption would only increase 1.4% year-over-year—a significant production-to-consumption mismatch.

The USDA’s December projections painted a similarly bearish picture. Global 2025/26 sugar production is forecast to climb 4.6% year-over-year to a record 189.318 MMT while global human consumption would increase just 1.4% year-over-year to 177.921 MMT. The USDA’s Foreign Agricultural Service specifically predicted Brazil’s 2025/26 sugar production would rise 2.3% to a record 44.7 MMT, India’s production would surge 25% to 35.25 MMT driven by favorable monsoon rains, and Thailand’s output would increase 2% to 10.25 MMT. Meanwhile, global sugar ending stocks would fall only 2.9%, indicating persistent inventory burdens.

The structural outlook suggests that while prices face headwinds from record production levels, the magnitude of oversupply may gradually moderate. Czarnikow projects the 2026/27 global surplus will narrow to 1.4 MMT as weak prices discourage future production investment. However, until production cycles adjust and demand absorbs excess supply, sugar prices will likely remain under pressure from the ongoing glut situation.