Global Sugar Price Slump: How Rising Production and Exports Are Reshaping the Market Today

New York sugar futures (SBH26) and London ICE white sugar (SWH26) both retreated this week, with prices continuing their steep descent driven by expectations of abundant worldwide sugar supplies. The New York contract slipped 0.02 points (-0.14%), while the London contract declined 1.60 points (-0.39%), reflecting the broader pressure on sugar prices across global markets today.

This downward trend marks a critical shift in the commodity complex, with New York sugar reaching its lowest point in two and a half months and London sugar hitting a five-year low. The core driver behind this collapse is straightforward: the world is facing a significant sugar surplus that shows no signs of easing.

Market Pressure: Global Surplus Outpacing Demand

Multiple forecasting agencies have aligned on a consistent outlook—worldwide sugar production is vastly outpacing consumption. Green Pool Commodity Specialists projects a 2.74 million metric ton (MMT) surplus for the 2025/26 season, while StoneX estimates an even larger 2.9 MMT surplus for the same period. These projections underscore why sugar prices continue to face downward pressure, as oversupply fundamentally undermines pricing power across futures markets.

The International Sugar Organization (ISO) projects a global surplus of 1.625 million MT for 2025/26, following a deficit of 2.916 million MT in 2024/25—a dramatic swing that highlights the structural shift in supply dynamics. Even more concerning for prices, Covrig Analytics raised its 2025/26 global surplus estimate to 4.7 MMT in December, up from 4.1 MMT previously. These competing forecasts, despite varying figures, all point in one direction: oversupply will continue to weigh on sugar prices.

Production Surge: Brazil and India Lead the Expansion

The spike in global sugar supply stems from two powerhouse producers ramping up output significantly. Brazil, the world’s largest sugar producer, is set for a record year. Conab, Brazil’s crop forecasting agency, increased its 2025/26 production estimate to 45 MMT, reflecting robust growth. Safras & Mercado added context by noting that Brazil is expected to process sugarcane increasingly for sugar rather than ethanol, with the sugar proportion rising to 50.82% in 2025/26 from 48.16% the prior year.

Meanwhile, India—the world’s second-largest sugar producer—is experiencing explosive growth. The India Sugar Mill Association (ISMA) reported that India’s output from October 1 to January 15 reached 15.9 MMT, a staggering 22% increase year-over-year. ISMA subsequently revised its full-season forecast upward to 31 MMT in November, an 18.8% jump from its prior estimate. Critically, ISMA reduced its projection for sugar used in ethanol production to 3.4 MMT from 5 MMT, freeing up additional supply for export markets.

Thailand, the world’s third-largest producer and second-largest exporter, is also seeing output expansion. The Thai Sugar Millers Corp forecasts a 5% year-over-year rise in the 2025/26 crop to 10.5 MMT, adding further to global supplies.

Export Dynamics: The Final Blow to Sugar Prices

What amplifies the surplus effect is the simultaneous surge in export availability. India’s government has signaled willingness to authorize additional sugar exports to relieve domestic oversupply. In November, the food ministry announced that mills could export 1.5 MMT of sugar during 2025/26. This follows India’s 2022/23 experience, when export quotas were implemented due to tight domestic stocks—a dramatic reversal that underscores the magnitude of the current surplus.

Higher exports from both Brazil and India are directly suppressing sugar prices globally. Brazil’s anticipated record output—combined with increased allocation to sugar production—means more material flooding export channels precisely when global demand remains tepid.

Global Production At Record Highs

The USDA’s December report projects that 2025/26 global sugar production will reach a record 189.318 MMT, a 4.6% increase year-over-year. Global human consumption is also expected to rise but far more modestly to 177.921 MMT, a 1.4% increase—meaning production is growing roughly 3 times faster than demand. This structural mismatch is the fundamental reason sugar prices continue their slide.

Global sugar ending stocks for 2025/26 are forecast to decrease only 2.9% to 41.188 MMT, indicating that even with higher consumption, inventories will remain elevated and continue suppressing prices. Czarnikow, a leading sugar trading firm, underscored this by raising its 2025/26 global surplus estimate to 8.7 MMT in November, up from 7.5 MMT in September.

Looking Ahead: When Could Sugar Prices Find Support?

One potential silver lining for the market lies in 2026/27 production forecasts. Safras & Mercado predicts that Brazil’s sugar output will decline 3.91% to 41.8 MMT in 2026/27, down from 43.5 MMT expected in 2025/26. The firm also anticipates Brazil’s sugar exports will drop 11% year-over-year to 30 MMT in 2026/27. If these projections materialize, production growth may finally moderate, providing relief to sugar prices.

The consensus is clear: today’s sugar price weakness reflects a commodity caught between record-high production and only modest demand growth. Until production growth slows—likely in 2026/27—expect downward pressure on sugar prices to persist across global markets.