StoneX has sharply reduced its forecast for the global sugar surplus in the 2025/26 season after lowering its estimate for production in India, even as output in Brazil remains stable and ethanol production increases, Finimize reported.
The brokerage now expects a global sugar surplus of about 870,000 metric tons for the October–September 2025/26 season, down from its earlier estimate of 2.9 million tons made in January.
The revision mainly reflects weaker production prospects in India. StoneX has cut its estimate for the country’s sugar output to 29.7 million tons, compared with its earlier projection of 32.3 million tons. The reduction is linked to early flowering of sugarcane in states such as Maharashtra and Karnataka, along with lower cane yields in Uttar Pradesh.
A smaller global surplus could help support sugar prices, which have faced pressure in recent years due to excess supply.
In Brazil’s centre-south region, sugar production is expected to remain around 40.5 million tons this season and stay broadly stable in the next season, even as sugarcane crushing increases. However, a larger share of the cane may be diverted to fuel production.
StoneX expects ethanol output in Brazil’s centre-south to rise, with total ethanol production projected to reach a record 37.2 billion litres in 2026/27.
Analysts say tighter supply conditions could make global sugar prices more sensitive to weather-related disruptions because there would be less surplus inventory to offset production losses.
Brazil’s production decisions will remain a key factor in the market. If ethanol margins remain attractive compared with sugar, mills may shift more cane towards fuel production, affecting the amount of sugar available for export.
As a result, the global sugar market is becoming more closely linked to oil prices, biofuel policies and expanding ethanol production capacity, including growing output of corn-based ethanol.
