Sugar prices eased in early trading after a global forecast pointed to a supply surplus in the coming season. The International Sugar Organization has projected that world sugar production will exceed demand by 1.22 million metric tonnes in 2025-26, reversing last year’s shortfall of 3.46 million tonnes, Nasdaq reported.
The ISO said the expected surplus is mainly due to higher production in India, Thailand, and Pakistan. It has forecast global sugar production to rise by 3% year-on-year to 181.3 million metric tonnes in 2025-26.
Prices had already come under pressure earlier this month amid expectations of continued oversupply. On February 12, sugar futures fell to their lowest level in more than five years on concerns about a prolonged global surplus.
Several market analysts have also projected large surpluses. Sugar trader Czarnikow expects a surplus of 3.4 million metric tonnes in 2026-27, following an 8.3 million tonne surplus in 2025-26. Green Pool Commodity Specialists estimate a surplus of 2.74 million tonnes in 2025-26 and a smaller surplus of 156,000 tonnes in 2026-27. StoneX has projected a 2.9 million tonne surplus for 2025-26.
However, some signs from Brazil are providing limited support to prices. Data showed that sugar production in Brazil’s Center-South region during the second half of January dropped sharply by 36% compared to a year earlier. Despite this decline, total production in the region for the current season through January remains slightly higher than last year. The share of cane used for sugar production has also increased compared to the previous season.
In financial markets, traders’ positions could influence price movements. Recent data showed that funds increased their net short positions in sugar futures to a record level, raising the possibility of a sharp price rebound if traders begin covering those positions.
Meanwhile, estimates for Brazil’s upcoming crop suggest a slight decline in production and exports in 2026-27, according to consulting firms.
In India, the sugar industry body has revised its production forecast for 2025-26 to 29.3 million tonnes, which is higher than last year but lower than its earlier estimate. Production so far this season has increased compared to the same period last year. The industry body has also reduced its estimate of sugar diverted for ethanol production, which could leave more supply available for exports.
The Indian government has approved an additional 500,000 tonnes of sugar for export this season, adding to the earlier export quota. India had introduced export limits in 2022-23 after lower production affected domestic supply.
In Thailand, production is expected to rise in the 2025-26 season, adding to global supply expectations. Thailand is one of the world’s largest sugar exporters.
Global outlook reports from the U.S. Department of Agriculture also project record-high world production in 2025-26, along with record consumption. However, ending stocks are expected to decline slightly compared to the previous year. The report also anticipates higher production in Brazil, India, and Thailand in the coming season.
