The world’s largest sugar trader has reduced its forecast for a global surplus in the upcoming season, warning that the market may be underestimating risks posed by weather and transportation challenges in Brazil, the top producer, reported Bloomberg.
Alvean now expects global sugar output in 2025-26 to exceed demand by just 400,000 tons, a sharp revision from its previous estimate of a surplus of around 1.5 million tons just two months ago. The company also forecasts a 5.5-million-ton deficit for the current season, ending September 2025.
Earlier this month, raw-sugar futures hit their lowest level since 2021, as traders anticipated an oversupply. Alvean’s updated forecast for 2025-26 falls at the lower end of projections shared at the New York Sugar Week, with some analysts and traders expecting a much larger glut.
“There’s a bit of complacency surrounding optimism about production recovery,” said Mauro Virgino, Alvean’s head of trading intelligence, in an interview. He pointed out that, over the last seven years, the sugar market had seen more disappointments than positive surprises.
In Brazil’s Center-South region, sugar production in 2025-26 is expected to reach 40.9 million tons, although it could drop to 39.2 million tons if yields fall short of expectations. The region is projected to process 593 million tons of sugarcane, nearly 5% lower than the previous year. However, that figure could fall further to 575 million tons if yields in April and May disappoint, partly due to dry weather conditions.
Shipping from Brazil, which has been running smoothly, has allowed importing countries to rely on a “just-in-time” market with minimal stockpiles. Virgino acknowledged, “The norm is that there should be hiccups,” suggesting that disruptions could occur.
Alvean’s revised forecast for a modest global surplus depends on a recovery in supply from Asia. India is projected to produce 31 million tons of sugar in 2025-26, a 19% increase, while Thai output is expected to rise by 1 million tons to 11.1 million.
