Sugar prices moved sharply higher on Wednesday, with New York futures touching a one-week high. The rise followed fresh data from Brazil showing a drop in output in the second half of January, Barchart reported.
Brazil’s sugar industry group Unica reported that production in the country’s Center-South region fell 36% year-on-year to just 5,000 metric tonnes during the period. The lower output supported prices. However, cumulative production for the 2025–26 season through January remains 0.9% higher at 40.24 million metric tonnes (MMT). The share of sugarcane used for sugar production has also increased to 50.74% this season from 48.14% last year.
Despite the mid-week rebound, sugar prices have been under heavy pressure. Last Thursday, futures hit their lowest level in more than five years, extending a decline that has lasted five months. The main concern remains a global sugar surplus.
Several industry analysts expect oversupply to continue. Czarnikow has projected a global surplus of 3.4 MMT in the 2026–27 crop year, following an 8.3 MMT surplus in 2025–26. Green Pool Commodity Specialists estimates a 2.74 MMT surplus for 2025–26 and a smaller surplus of 156,000 metric tonnes for 2026–27. StoneX expects a 2.9 MMT surplus in 2025–26.
In India, output has risen sharply. The Indian Sugar & Bio-energy Manufacturers Association (ISMA) reported on January 19 that production between October 1 and January 15 increased 22% year-on-year to 15.9 MMT. In November, ISMA raised its full-season 2025–26 production estimate to 31 MMT from 30 MMT, citing the strongest monsoon in five years. It also reduced the estimate of sugar diverted for ethanol production to 3.4 MMT from an earlier 5 MMT forecast, which could leave more sugar available for export. India is the world’s second-largest sugar producer.
Expectations of higher exports from India have weighed on prices. Last Friday, the government approved an additional 500,000 metric tonnes of sugar exports for the 2025–26 season, in addition to the 1.5 MMT already cleared in November. India had introduced export quotas in 2022–23 after late rains reduced output and tightened domestic supplies.
Covrig Analytics raised its estimate for the 2025–26 global sugar surplus to 4.7 MMT in December, up from 4.1 MMT earlier. However, it expects the surplus to narrow to 1.4 MMT in 2026–27 as low prices discourage production.
Brazil’s production outlook remains a key factor. The country’s crop agency Conab increased its 2025–26 sugar output estimate to 45 MMT from 44.5 MMT in November. At the same time, consulting firm Safras & Mercado expects Brazil’s production to fall by 3.91% in 2026–27 to 41.8 MMT from 43.5 MMT projected for 2025–26. The firm also sees Brazilian exports declining 11% year-on-year to 30 MMT in 2026–27.
The International Sugar Organization (ISO) has forecast a global surplus of 1.625 MMT in 2025–26, reversing a deficit of 2.916 MMT in 2024–25. The group said higher output in India, Thailand, and Pakistan is driving the surplus. It expects global production to rise 3.2% to 181.8 MMT in 2025–26.
Thailand’s production is also set to increase. The Thai Sugar Millers Corporation has projected a 5% rise in the country’s 2025–26 sugar crop to 10.5 MMT. Thailand is the world’s third-largest sugar producer and second-largest exporter.
The United States Department of Agriculture (USDA), in its December report, projected that global sugar production will climb 4.6% year-on-year to a record 189.318 MMT in 2025–26. Global consumption is expected to increase 1.4% to 177.921 MMT. Ending stocks are forecast to decline 2.9% to 41.188 MMT.
The USDA’s Foreign Agricultural Service estimates that Brazil’s 2025–26 sugar production will rise 2.3% to a record 44.7 MMT. It also forecasts India’s output to jump 25% to 35.25 MMT and Thailand’s production to grow 2% to 10.25 MMT, supported by favourable weather and increased planting.
