Global Sugar Stocks Face Mounting Pressure as Major Producers Forecast Record Output

Sugar futures took a significant hit on Thursday, with March NY world sugar #11 closing down 1.90% and March London ICE white sugar #5 sliding 1.52%, as markets grapple with an anticipated surge in supply from the world’s top producing nations.

India’s Export Boost Signals Oversupply Concerns

The downward momentum accelerated after India’s food secretary indicated the government would permit additional sugar exports to address a domestic supply glut. This follows November’s announcement allowing mills to export 1.5 MMT in the 2025/26 season—a significant shift from the export quota system introduced in 2022/23.

Production indicators underscore the supply challenge. The India Sugar Mill Association reported that sugar production from October 1 to December 15 surged 28% year-over-year to 7.83 MMT. More broadly, ISMA revised its 2025/26 estimate upward to 31 MMT from 30 MMT, representing an 18.8% year-on-year increase. Even more bullish forecasts emerged, with India’s National Federation of Cooperative Sugar Factories projecting 34.9 MMT—a 19% jump annually.

A critical factor bolstering export potential: ISMA cut its ethanol production estimate to 3.4 MMT from 5 MMT, freeing up substantially more sugar stocks for international sales.

Brazil and Thailand Amplify Supply Headwinds

Brazil’s outlook compounds the bearish picture. Conab raised its 2025/26 sugar production forecast to 45 MMT, while Unica reported that cumulative Center-South output through November reached 39.904 MMT, up 1.1% year-over-year. Notably, the share of cane directed toward sugar production climbed to 51.12% from 48.34% the prior year.

Currency dynamics add another layer of pressure. The Brazilian real hit a 4.5-month low against the dollar, incentivizing domestic producers to accelerate export sales.

Thailand, the world’s third-largest producer and second-largest exporter, isn’t far behind. The Thai Sugar Millers Corp projects 2025/26 output will rise 5% annually to 10.5 MMT.

What Global Forecasters Predict

The International Sugar Organization painted a concerning picture: a 1.625 million MT surplus projected for 2025/26, a dramatic reversal from the 2.916 million MT deficit in 2024/25. Sugar trader Czarnikow pushed its global surplus estimate even higher to 8.7 MMT.

USDA data released Tuesday shows global 2025/26 sugar production climbing 4.6% to a record 189.318 MMT, while consumption is expected to grow just 1.4% to 177.921 MMT. This supply-demand imbalance will weigh heavily on prices. The USDA’s Foreign Agricultural Service projects Brazil’s output at 44.7 MMT, India’s at 35.25 MMT, and Thailand’s at 10.25 MMT—all record or near-record levels.

The consensus is clear: with sugar stocks expected to accumulate meaningfully and export capacity expanding across major producing regions, downside price pressure is likely to persist in the near term.