Global Brown Sugar Market Faces Surplus Pressure Amid Rising Production Forecasts

The brown sugar price landscape in 2025/26 is being fundamentally reshaped by an anticipated global production surge, with major forecasters projecting significant supply increases across all major producing regions. The USDA’s latest biannual assessment, released on December 16, provides the most comprehensive outlook yet, forecasting global sugar production will climb 4.6% year-on-year to reach an unprecedented 189.318 million metric tons (MMT) in 2025/26.

Regional Production Dynamics Reshape Market Supply

Brazil’s Record Output Trajectory

Brazil, the world’s largest sugar producer, is positioned to deliver record volumes that could fundamentally alter pricing dynamics. The USDA’s Foreign Agricultural Service (FAS) projects Brazil’s 2025/26 production will rise 2.3% year-over-year to 44.7 MMT, marking another historical high. However, this stands in contrast to earlier assessments from Conab, Brazil’s official crop forecasting agency, which on November 4 had estimated 45 MMT for 2025/26, up from a prior 44.5 MMT projection.

The operational data reinforces this bullish production picture: Unica reported on December 16 that Brazil’s cumulative 2025-26 Center-South sugar output through November rose 1.1% year-over-year to 39.904 MMT. More significantly, mills are increasingly prioritizing sugar over ethanol, with the ratio of cane crushed for sugar rising to 51.12% in 2025/26 compared to 48.34% in 2024/25.

Yet despite these record projections, some consultancies offer a contrarian view. Safras & Mercado issued a more conservative assessment, forecasting that Brazil’s sugar production in 2026/27 will actually decline 3.91% to 41.8 MMT from 43.5 MMT expected in 2025/26. The firm projects Brazilian exports in 2026/27 will fall 11% year-over-year to 30 MMT, suggesting potential tightness in the subsequent season.

India’s Expanded Production and Export Potential

India’s trajectory as the world’s second-largest producer has shifted dramatically. The FAS projects India’s 2025/26 production will surge 25% year-over-year to 35.25 MMT, substantially higher than earlier official estimates. The India Sugar Mill Association (ISMA) has raised its forecast to 31 MMT, up from an earlier 30 MMT projection, representing an 18.8% year-over-year increase.

Recent production data validates these bullish expectations: ISMA reported that Indian sugar production from October 1 to December 31, 2025 jumped 24% year-over-year to 11.83 MMT. This exceptional output is being driven by favorable monsoon rains and increased sugar acreage cultivation.

Critically, ISMA has adjusted its ethanol allocation downward, cutting the estimate for brown sugar utilized for ethanol production to 3.4 MMT from a July forecast of 5 MMT. This reallocation frees up additional capacity for export markets. India’s food ministry has already signaled its willingness to increase overseas sales, having approved 1.5 MMT of sugar exports for the 2025/26 season, potentially with room for additional quantities if domestic supplies warrant such action.

Thailand’s Growing Export Contribution

Thailand, positioned as the world’s third-largest producer and second-largest exporter, continues its production expansion. The Thai Sugar Millers Corp on October 1 projected that Thailand’s 2025/26 sugar crop will increase 5% year-over-year to 10.5 MMT. The FAS offered a slightly more conservative estimate of 10.25 MMT for Thailand’s 2025/26 output, representing a 2% year-over-year increase.

Market Surplus Signals Emerging

The aggregate impact of these regional increases is creating an anticipated global surplus environment. The International Sugar Organization (ISO) on November 17 forecasted a 1.625 million MT surplus in 2025-26, a dramatic reversal from the 2.916 million MT deficit recorded in 2024-25. ISO attributes this surplus expansion to increased production in India, Thailand, and Pakistan combined.

ISO’s broader production estimate projects a 3.2% year-over-year rise in global sugar production to 181.8 million MT in 2025-26. Consumption, by contrast, is forecast to grow at a more modest pace, with global 2025/26 human sugar consumption projected to increase just 1.4% year-over-year to a record 177.921 MMT according to the USDA.

Independent sugar trading firm Czarnikow took an even more bearish stance, projecting a global 2025/26 sugar surplus of 8.7 MMT on November 5, significantly above its September forecast of 7.5 MMT. This 1.2 MMT upward revision in just two months reflects the accelerating supply momentum.

Near-Term Price Action and Technical Considerations

March NY world sugar #11 recently recovered from one-week lows, trading up 0.20 (+1.35%), while March London ICE white sugar #5 rose 2.40 (+0.56%). This intraday recovery has been attributed to year-end short covering by funds, a seasonal phenomenon common in commodity markets during the final month of the trading calendar.

Initial downward pressure earlier in the session reflected broader dollar strength, as the dollar index (DXY00) reached a one-week high, weighing on most commodity prices including brown sugar price movements. However, technical support held as market participants repositioned ahead of the year-end close.

Monday’s price action saw NY sugar match last Wednesday’s 2.25-month high, driven partially by temporary expectations of reduced sugar supplies from Brazil. This recent recovery highlights how brown sugar price volatility remains sensitive to supply revisions, even when longer-term forecasts point toward surplus conditions.

Outlook and Investment Implications

The convergence of surging global production, particularly from India and Thailand alongside Brazil’s maintained high output, suggests that brown sugar price support could face increased pressure through 2025/26 and into 2026/27. The USDA projects that 2025/26 global sugar ending stocks will fall 2.9% year-over-year to 41.188 MMT, though this modest drawdown occurs against a backdrop of expanding production and ample supplies.

The dichotomy between near-term technical strength (driven by short-covering) and longer-term fundamental pressures (driven by supply abundance) suggests that traders should monitor regional production data closely, particularly any revisions to Brazil’s 2026/27 outlook or changes to India’s export policy decisions, as these factors could reshape the current surplus narrative.