Global Sugar Supply Surge Pressures Prices Across Barchart Markets

The world sugar market faces significant headwinds as abundant production forecasts from major producers continue to weigh on price momentum. According to Barchart’s commodity analysis, London ICE white sugar #5 declined -4.70 points (-1.12%) in recent trading, while March NY world sugar #11 managed a modest gain of +0.06 points (+0.41%), reflecting divergent market dynamics between the two largest trading venues. The weakness in London sugar underscores growing concerns about a global supply glut that could persist through the 2025-26 production season.

Production Expansion Reshapes the Market Landscape

Multiple sources on Barchart’s tracking dashboard reveal that the world’s top sugar producers are simultaneously increasing output at record or near-record levels. Brazil’s Center-South region, accounting for the majority of the country’s supply, has already increased 2025-26 cumulative production through December by 0.9% year-over-year to 40.222 MMT. More concerning for prices, Brazil’s sugar cane allocation ratio rose to 50.82% for sugar production (versus ethanol use), suggesting further supply growth ahead.

India, the world’s second-largest producer, is experiencing an even more dramatic production surge. From October 1 through mid-January, India’s sugar output jumped 22% year-over-year to 15.9 MMT, prompting upward revisions to full-season forecasts. Major institutions now estimate India’s 2025-26 total production at 31 MMT—an 18.8% year-over-year increase—while simultaneously reducing allocations for ethanol production from 5 MMT to 3.4 MMT. This shift should expand India’s export capacity, a crucial factor given the country’s decision to permit additional sugar exports through its 1.5 MMT export allocation announced by the food ministry.

Thailand, ranked as the world’s third-largest producer and second-largest exporter, is also expanding. The Thai Sugar Millers Corporation projected a 5% year-over-year increase in the 2025-26 crop to 10.5 MMT, adding further pressure to already-fragile market fundamentals.

A Surplus Consensus Emerges Among Leading Forecasters

The convergence of surplus projections from multiple institutions underscores the structural challenges facing sugar bulls. Covrig Analytics raised its 2025-26 global surplus estimate to 4.7 MMT in December, up from 4.1 MMT just two months earlier. The International Sugar Organization (ISO) projected a 1.625 million MT surplus for 2025-26 following a deficit the prior year, driven primarily by production increases in India, Thailand, and Pakistan. ISO forecasts global production will rise 3.2% year-over-year to 181.8 MMT while consumption grows at just 1.4%.

Sugar trader Czarnikow provided an even more bearish outlook, raising its 2025-26 surplus estimate to 8.7 MMT—up 1.2 MMT from September projections. When tracked through Barchart’s commodity bulletin comparisons, these divergent surplus estimates (ranging from 1.6 to 8.7 MMT) highlight the uncertainty surrounding how quickly prices will clear the oversupply.

USDA’s December Report Confirms Record Production Cycle

The USDA’s December forecast delivered the most comprehensive outlook, projecting that 2025-26 global production would surge 4.6% year-over-year to a record 189.318 MMT while human consumption rises at just 1.4% to 177.921 MMT. The agency predicted Brazil’s output at 44.7 MMT (up 2.3% y/y), India at 35.25 MMT (up 25% y/y), and Thailand at 10.25 MMT (up 2% y/y). Notably, USDA’s forecast for global ending stocks fell 2.9% year-over-year to 41.188 MMT, suggesting some stock drawdown despite the production surge—though not enough to prevent the surplus dynamic from persisting.

When Will Price Support Emerge?

While the current environment appears challenging for bulls, some longer-term support factors are taking shape. Consulting firm Safras & Mercado projects that Brazil’s sugar production will decline 3.91% in 2026-27 to 41.8 MMT from the 2025-26 level of 43.5 MMT, with exports falling 11% year-over-year to 30 MMT. Covrig Analytics also anticipates the global surplus will compress to just 1.4 MMT in 2026-27 as weak prices discourage production expansion in less-efficient regions.

For now, London sugar traders and those monitoring price action through Barchart’s real-time feeds face a market tilted toward lower prices as global supplies remain abundant and major producing nations expand capacity. The convergence of surplus outlooks from USDA, ISO, Czarnikow, and Covrig suggests that meaningful price recovery may require waiting until production cycles turn lower or unexpected supply disruptions emerge.