Global Sugar Market Under Pressure as Major Producers Ramp Up Output

The sugar market is navigating conflicting signals today, with March NY futures (SBH26) rising modestly by +0.01 points (+0.07%) while London ICE white sugar (SWH26) declined -2.90 points (-0.68%). The underlying trend reflects mounting supply concerns as top producing nations accelerate their crushing seasons.

India’s Production Surge Reshapes Market Dynamics

India is dramatically expanding its sugar output, creating headwinds for global prices. The India Sugar Mill Association reported a striking +43% year-over-year increase in production between October-November, reaching 4.11 MMT. Active mills reached 428 as of late November, compared to 376 mills operating a year prior—a tangible sign of the production ramp-up underway.

Looking ahead, ISMA elevated its 2025/26 season projection to 31 MMT from 30 MMT, representing +18.8% year-over-year growth. This compares to a severe -17.5% contraction in 2024/25, when output slumped to just 26.1 MMT. The National Federation of Cooperative Sugar Factories painted an even more bullish production scenario, forecasting output could climb as high as 34.9 MMT for 2025/26—a +19% year-over-year increase driven by expanded planted acreage and favorable monsoon conditions.

However, policy adjustments may temper export volumes. On November 14, India’s food ministry restricted 2025/26 sugar exports to 1.5 MMT, down from earlier expectations of 2 MMT. Yet the ministry is simultaneously considering higher ethanol prices to incentivize cane diversion toward fuel production, potentially freeing up more cane for sugar processing.

Brazil and Thailand Maintain Upward Momentum

Brazil’s sugar sector continues its robust expansion. Conab, the government forecasting agency, raised its 2025/26 production estimate to 45 MMT from 44.5 MMT in early November. Unica’s mid-November data showed Center-South output rising +8.7% year-over-year in the first half of November alone, with cumulative seasonal production climbing +2.1% year-over-year to 39.179 MMT.

Thailand, the world’s third-largest producer, is also ramping up. The Thai Sugar Millers Corp projects 2025/26 output will reach 10.5 MMT, a +5% year-over-year increase from the prior season’s 10.00 MMT production level.

Global Surplus Threatens Price Support

International forecasters are increasingly bearish. The International Sugar Organization on November 17 projected a 1.625 million MT surplus for 2025/26, a dramatic reversal from the prior year’s 2.916 million MT deficit. The ISO also lifted its global 2025/26 production estimate to 181.8 MMT, representing +3.2% year-over-year growth. Meanwhile, sugar trader Czarnikow boosted its global surplus forecast to 8.7 MMT for 2025/26, up from a September estimate of 7.5 MMT.

The USDA’s Foreign Agricultural Service painted similarly expansive supply scenarios. Global 2025/26 production is projected to reach a record 189.318 MMT (+4.7% y/y), while consumption will only climb +1.4% to 177.921 MMT. Global ending stocks are forecast to jump +7.5% year-over-year to 41.188 MMT—creating a significant imbalance between supply and demand.

Market Context and Price Pressures

These supply projections have already weighed on prices. London sugar posted a 4.75-year low in mid-November, while NY contracts fell to 5-year lows in early November. The abundance of monsoon rainfall in India—recorded at 937.2 mm as of late September, 8% above normal and the strongest in five years—suggests Indian growers will deliver substantial additional cane tonnage.

With major sugar-producing nations simultaneously accelerating output while global consumption growth remains tepid, price support appears challenged in the near term despite modest policy efforts to manage export flows.