March 27, 2026 — Global sugar prices faced downward pressure as data showed increased production in Brazil, the world’s largest producer. This comes despite recent price support from rising crude oil costs and supply chain disruptions.
Production Data Weighs on Market
May NY world sugar #11 (SBK26) closed down 0.69% on Friday. May London ICE white sugar #5 (SWK26) also finished lower. The decline followed a report from Brazilian industry group Unica showing cumulative 2025-26 Center-South sugar output from October through mid-March rose 0.7% year-over-year to 40.25 million metric tons (MMT).
Sugar mills have boosted the proportion of cane crushed for sugar to 50.61%, up from 48.08% last year. This shift away from ethanol production directly increases sugar supplies available to the global market.
Countervailing Forces Provide Support
Prices had rallied to a 5.5-month high just one day earlier, on Thursday. That surge was linked to crude oil prices reaching a 3.75-year high. Higher oil prices typically boost ethanol values, which can incentivize mills to produce more biofuel and less sugar, tightening sugar supplies.
Supply disruptions have also offered some price support. According to Covrig Analytics, the closure of the Strait of Hormuz has constrained approximately 6% of the world’s sugar trade, limiting refined sugar output.
Persistent Surplus Forecasts
Earlier in March, sugar prices plunged to 5.5-year lows on concerns over a lasting global surplus. Multiple analyst groups have projected substantial oversupply.
On February 11, sugar trader Czarnikow forecast a global sugar surplus of 3.4 MMT for the 2026/27 crop year. This would follow an estimated 8.3 MMT surplus in 2025/26. Green Pool Commodity Specialists, in a January 29 assessment, predicted a 2.74 MMT surplus for 2025/26.
StoneX, on February 13, projected a 2025/26 surplus of 2.9 MMT. The International Sugar Organization (ISO) added to this outlook on February 27, forecasting a 1.22 MMT surplus for 2025-26. The ISO attributed the surplus to increased production in India, Thailand, and Pakistan, forecasting a 3.0% yearly rise in global output to 181.3 million MMT.
Indian Output and Export Potential
India, the world’s second-largest sugar producer, reported robust production. The Indian Sugar and Bio-energy Manufacturers Association (ISMA) stated last Tuesday that India’s 2025-26 sugar output from October 1 to March 15 rose 10.5% year-over-year to 26.2 MMT.
On March 11, ISMA projected full-season production at 29.3 MMT, though it reduced its estimate for sugar diverted to ethanol production. This change may allow India to increase sugar exports. The Indian government approved an additional 500,000 MT for export on February 13, adding to a 1.5 MMT quota approved in November.
Official USDA Projections
In a bi-annual report released December 16, the U.S. Department of Agriculture (USDA) projected global 2025/26 sugar production would climb 4.6% to a record 189.318 MMT. Global human sugar consumption was forecast to increase 1.4% to a record 177.921 MMT.
The USDA’s Foreign Agricultural Service (FAS) predicted Brazil’s 2025/26 sugar production would rise 2.3% to a record 44.7 MMT. It also forecast a 25% yearly increase in India’s output to 35.25 MMT, driven by favorable weather and expanded acreage. Thailand’s production was seen rising 2% to 10.25 MMT.
The market now balances near-term supply constraints against the weight of ample production forecasts from the world’s leading growers. Further price direction will hinge on crude oil market movements and actual export volumes from key producers like India and Brazil.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
