Why Global Sugar Supplies Are About to Explode (And What It Means for Prices)

Sugar prices bounced slightly on Monday—NY March contract up 0.27%, London ICE white sugar up 0.19%—but don’t get fooled by the short-term uptick. The bigger picture is bearish as hell.

The Real Story: Too Much Sugar Coming

Here’s what’s happening:

India’s exports are shrinking. India’s food ministry just cut export quotas from 2 MMT to 1.5 MMT for 2025/26. This sounds bullish, right? But it’s actually a double-edged sword. The government wants to divert more sugarcane into ethanol production instead of sugar milling—meaning less sugar hitting the market, but also a sign that India itself has plenty of crop.

The real problem? Global surplus is massive. The International Sugar Organization (ISO) is forecasting a 1.625 million MT surplus in 2025-26, a complete flip from the 2.916 million MT deficit last year. That’s driven by three countries:

• Brazil (world’s largest producer): Raising 2025/26 output estimates to 45 MMT from 44.5 MMT. October Center-South production jumped 16.4% y/y to 2.068 MT. Mills are crushing more cane for sugar (46.02% vs 45.91% year-ago).
• India (world’s #2): India Sugar Mill Association just hiked its 2025/26 production estimate to 31 MMT from 30 MMT—up 18.8% y/y. Why? Bumper monsoon rains (937.2 mm, 8% above normal) and larger planted acreage.
• Thailand (world’s #3): Output projected to hit 10.5 MMT in 2025/26, a 5% y/y jump.

Global production is heading for all-time highs. The USDA forecasts 2025/26 global sugar production will climb 4.7% y/y to 189.318 million MT—a record. Meanwhile, global consumption is only growing 1.4% to 177.921 MMT. The gap? Ending stocks are swelling 7.5% y/y to 41.188 MMT.

The Bottom Line

Sugar hit 5-year lows in early November for a reason. Short-term support from India’s export cut won’t outweigh the structural surplus. With Brazil ramping up production, India’s bumper crop coming online, and Thailand increasing output, prices are likely to stay under pressure. The market is pricing in a sugar glut, and the fundamentals support it.

Traders: Watch for break-out moves below recent lows if supply forecasts keep rising.