Global Sugar Market Faces Mixed Signals Amid Shifting Production Dynamics

Recent sugar price movements reveal a complex market landscape shaped by divergent production trends and evolving supply expectations worldwide. Trading activity across major sugar exchanges shows the commodity navigating significant headwinds, with shifts in major producing nations creating ripple effects through the global market. The international sugar news landscape reflects how production choices by key suppliers are reshaping price dynamics.

Brazil Intensifies Sugar Output While Pushing Prices Lower

Brazil’s sugar production strategy is playing a central role in current market pressures. According to data from Unica, Brazil’s Center-South region—which accounts for the majority of the country’s sugar output—saw production surge in August. The region’s sugar output climbed 16% year-over-year to 3,615 million tons during the first half of August, while the percentage of sugarcane processed specifically for sugar expanded to 55% from approximately 49% in the prior year period.

This supply growth comes despite broader weakness in cumulative production figures. Through mid-August, total Center-South sugar output for the 2025-26 season stood down 4.7% year-over-year at 22.886 MMT, indicating that seasonal dynamics remain uneven. However, reports from Covrig Analytics suggest that Brazilian mills are deliberately prioritizing sugar manufacturing over ethanol production, a strategic shift likely to intensify as harvesting reaches peak seasons. The dry conditions affecting sugarcane crops are fueling this prioritization, encouraging mills to maximize sugar yields.

Interestingly, the Brazilian government’s crop forecasting body Conab adjusted its outlook downward in late August, reducing its 2025-26 production forecast by 3.1% to 44.5 MMT from an earlier estimate of 45.9 MMT. This revision underscores the volatility in supply projections, even as production momentum remains evident on the ground.

Global Supply Equilibrium Shifting on Multiple Fronts

The international dimension of sugar markets reflects a gradually tightening supply picture, though downward pressure on prices persists. The International Sugar Organization recently released projections indicating that the global sugar market will remain in deficit status for the 2025-26 season—marking the sixth consecutive year of supply shortfalls. ISO forecasts a deficit of 231,000 MT for the coming season, a significant improvement from the 4.88 MMT shortfall recorded in 2024-25.

Global sugar production across all nations is projected to expand 3.3% year-over-year to 180.6 MMT, while consumption is expected to grow a more modest 0.3% to 180.8 MMT according to ISO assessments. This supply growth is being driven by expansion in multiple producing regions, suggesting that even as deficits narrow, market balance remains delicate.

The U.S. Department of Agriculture, in its May biannual forecast, had projected that global production would reach 189.318 MMT—a record level. However, subsequent revisions and regional shortfalls have tempered these earlier optimistic estimates, reflecting the uncertainty surrounding final crop outcomes.

India Signals Production Recovery as Rains Support Crops

India, the world’s second-largest sugar producer, represents another critical variable in supply dynamics. Recent favorable monsoon conditions have boosted expectations for production recovery. India’s Meteorological Department reported that cumulative monsoon rainfall reached 767.1 mm as of early September, running approximately 7% above normal levels—conditions supporting larger cane harvests.

Against this backdrop, India’s National Federation of Cooperative Sugar Factories has signaled intentions to seek permission for sugar exports, with preliminary discussions suggesting potential authorization to ship 2 MMT of sugar in the 2025-26 season. The Indian Sugar and Bio-energy Manufacturers Association has similarly indicated export aspirations.

Earlier projections from India’s Federation suggested that 2025-26 sugar production could climb 19% year-over-year to 35 MMT, following a steep 17.5% decline in the prior season. The USDA’s Foreign Agricultural Service reinforced this outlook, projecting India’s 2025-26 production could reach 35.3 MMT under favorable conditions. These production gains would signal a significant recovery from the 5-year production low of 26.2 MMT recorded in 2024-25, according to the Indian Sugar Mills Association.

Thailand Contributes to Global Supply Expansion

Thailand, the world’s third-largest sugar producer and second-largest exporter, is also contributing to global production growth. The country’s Office of the Cane and Sugar Board reported that 2024-25 sugar production climbed 14% year-over-year to 10.00 MMT. Looking ahead, the USDA projects Thailand’s 2025-26 output could expand a further 2% to 10.3 MMT, demonstrating continued supply momentum from this major exporting nation.

Thailand’s substantial export volumes amplify the significance of its production trajectory, as increases there directly feed into global market supplies and pricing pressures.

Market Implications as Production Gains Persist

The cumulative effect of expanding production from Brazil, India, and Thailand is creating sustained headwinds for sugar valuations. While the International Sugar Organization maintains that global deficits will persist through the 2025-26 season, the narrowing gap between supply and demand—coupled with actual production gains in major regions—continues to constrain price recovery.

Earlier in the year, when surplus expectations dominated sentiment, sugar prices had retreated sharply, with New York sugar sliding to a 4.25-year low and London sugar falling to a 4-year low in early July. More recently, prices have stabilized somewhat, though they remain vulnerable to any evidence of further production expansion or demand weakness.

The sugar price picture remains hostage to the tension between deficit forecasts from international organizations and tangible production growth from major suppliers. Market participants are monitoring harvest seasons, weather patterns, and mill operating strategies across all major regions to gauge whether production gains can be sustained or whether shortage concerns will eventually reassert themselves.