Global Sugar Market Faces Mounting Pressure from Persistent Oversupply Dynamics

Sugar prices retreated in recent trading sessions, with March New York sugar contracts declining 1.30% and London white sugar dropping 1.39%. The downward pressure reflects deepening concerns about a prolonged global sugar surplus that analysts expect will continue weighing on sentiment. Industry observers point to a confluence of factors reshaping the sugar mercado outlook, from record production forecasts to shifting export policies among the world’s largest producers.

Record Production Forecasts Across Major Sugar-Producing Regions

Brazil’s sugar output trajectory remains a critical factor for the global sugar market. The Brazilian crop forecasting agency Conab projected Brazil’s 2025/26 sugar production at 45 MMT, with the ratio of sugarcane crushed for sugar reaching 50.82% in the current season. However, consulting firm Safras & Mercado introduced a bearish note for future periods, forecasting that Brazil’s 2026/27 production would decline to 41.8 MMT, accompanied by a 11% drop in exports to 30 MMT.

India, the world’s second-largest sugar producer, is dramatically reshaping supply dynamics. The India Sugar Mill Association reported that 2025/26 output through mid-January reached 15.9 MMT, representing a 22% year-over-year increase. More significantly, ISMA raised its full-season 2025/26 production estimate to 31 MMT—an 18.8% jump compared to the prior year. Policy changes are also accelerating India’s market impact; the government approved 1.5 MMT in sugar exports for the 2025/26 season, a significant reversal from the quota system implemented in 2022/23 after production shortfalls.

Thailand, the world’s third-largest sugar producer and second-largest exporter, is also contributing to global supply growth. The Thai Sugar Millers Corporation projected that Thailand’s 2025/26 sugar crop would expand 5% year-over-year to 10.5 MMT, adding further weight to the oversupply narrative in the global sugar mercado.

Divergent Forecasts from Leading Sugar Market Analysts

A critical divergence has emerged among major commodity analysts assessing the sugar market outlook. Czarnikow, the global sugar trader, expects a 3.4 MMT global surplus in 2026/27 following an 8.3 MMT surplus in 2025/26. However, other analysts present varying perspectives: Green Pool Commodity Specialists forecasts a 2.74 MMT surplus for 2025/26 and a smaller 156,000 MT surplus for 2026/27, while StoneX anticipates a 2.9 MMT surplus in 2025/26.

The International Sugar Organization offered a more optimistic 2025-26 view, projecting a 1.625 MMT surplus—a dramatic reversal from the 2.916 MMT deficit recorded in 2024/25. ISO attributed the surplus to increased production across India, Thailand, and Pakistan, forecasting global production would climb 3.2% to 181.8 million MT.

Covrig Analytics presented the most bullish near-term assessment, raising its 2025/26 global surplus estimate to 4.7 MMT. Yet even Covrig projects substantial relief ahead, forecasting the 2026/27 surplus will compress to just 1.4 MMT as weaker prices discourage future production decisions.

The USDA’s December forecast painted a picture of record production levels. The agency projected global 2025/26 sugar production would surge 4.6% to a record 189.318 MMT, with human consumption rising just 1.4% to 177.921 MMT. This production-consumption imbalance underscores the supply pressures affecting sugar prices. The USDA’s Foreign Agricultural Service specifically projected Brazil’s 2025/26 output at a record 44.7 MMT (+2.3% y/y) and India’s production surging 25% to 35.25 MMT, driven by favorable monsoon conditions and expanded acreage.

Market Implications and Price Outlook

The persistence of global oversupply across the sugar mercado represents a formidable headwind for price recovery. While some analysts expect surplus conditions to moderate in 2026/27, the near-term outlook suggests continued pressure from abundant supplies and elevated export availability from India and other major producers. The sugar market’s trajectory will likely remain heavily influenced by production reality and the pace at which weaker prices encourage supply-side adjustments among cultivators and processors globally.