Global Sugar Cane Supply Surge Drags Market to Multi-Year Lows

Recent trading sessions have exposed the mounting pressure on sugar markets as March NY sugar fell to a 2.5-month low, while March London ICE white sugar dropped to a 5-year low. The selloff reflects a fundamental supply-demand imbalance that major commodity analysts now expect to persist through multiple crop cycles. With sugar cane production reaching record levels across the world’s major producing regions, prices face an extended headwind from oversupply dynamics that are reshaping global market fundamentals.

Record Sugar Cane Production Swells Global Inventory

The surge in sugar cane for sale across major producing nations has reached unprecedented levels. Brazil, the world’s largest sugar producer, reported cumulative 2025-26 Center-South sugar output through December rising 0.9% year-over-year to 40.222 MMT, while the ratio of cane crushed for sugar climbed to 50.82% in 2025/26 from 48.16% in 2024/25. Looking ahead, Brazil’s sugar production is forecast to reach 44.7 MMT in 2025/26 according to the USDA’s Foreign Agricultural Service, up 2.3% year-over-year and marking a record output level.

India, the world’s second-largest sugar producer, has dramatically ramped up its sugar cane crushing. From October 1 to January 15, India’s 2025-26 sugar output surged 22% year-over-year to 15.9 MMT. The India Sugar Mill Association (ISMA) further raised its full-year 2025/26 production estimate to 31 MMT in November, representing an 18.8% year-over-year increase from the prior-year forecast of 30 MMT. The USDA projects India’s 2025/26 sugar production could climb even higher to 35.25 MMT, a 25% year-over-year jump driven by favorable monsoon conditions and expanded sugar cane acreage.

Thailand, the world’s third-largest sugar producer, is also ramping up output. The Thai Sugar Millers Corp projected Thailand’s 2025/26 sugar crop will increase 5% year-over-year to 10.5 MMT, while the USDA estimates it at 10.25 MMT with a 2% year-over-year rise. The confluence of record production across these three major regions has created a global supply glut that commodity traders cannot absorb.

Major Exporters Rush to Offload Surplus Sugar Cane Supply

The accumulation of sugar cane-derived production has prompted major exporting nations to accelerate shipments to clear domestic surpluses. India, having introduced export quota systems in 2022/23 following production constraints, has now shifted course. India’s food ministry approved mills to export 1.5 MMT of sugar in the 2025/26 season, with the food secretary indicating the government may permit additional shipments to reduce the domestic supply glut. The ISMA simultaneously cut its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, redirecting cane-derived sugars toward export markets rather than domestic fuel applications.

Brazil faces similar pressures, yet faces a different future trajectory. While current production remains robust, Safras & Mercado forecasted on December 23 that Brazil’s sugar production will decline 3.91% to 41.8 MMT in 2026/27 from the 43.5 MMT expected in 2025/26. The consultancy expects Brazil’s sugar exports to fall 11% year-over-year to 30 MMT in 2026/27, suggesting the export surge is a temporary relief valve for current excess supplies rather than a structural shift.

Market Forecasts Signal Extended Oversupply Pressure

The world faces a multi-year oversupply cycle according to competing forecasts from leading commodity intelligence firms. The International Sugar Organization (ISO) on November 17 forecast a 1.625 million MT sugar surplus in 2025-26, following a 2.916 million MT deficit in 2024-25, driven by increased production in India, Thailand, and Pakistan. ISO projects global sugar production will rise 3.2% year-over-year to 181.8 million MT in 2025-26.

However, more aggressive surplus estimates have emerged. Sugar trader Czarnikow projected a global 2025/26 sugar surplus of 8.3 MMT, raising expectations to 3.4 MMT for 2026/27. Green Pool Commodity Specialists forecasted a 2.74 MMT global surplus for 2025/26 and a 156,000 MT surplus for 2026/27, while StoneX estimated a 2.9 MMT global surplus in 2025/26. Covrig Analytics initially raised its 2025/26 global surplus estimate to 4.7 MMT in December before projecting a decline to 1.4 MMT in 2026/27 as weak prices discourage future production.

The USDA’s December 16 forecast underscores the magnitude of the supply challenge. Global 2025/26 sugar production was projected to climb 4.6% year-over-year to a record 189.318 MMT, while global human consumption would increase only 1.4% year-over-year to 177.921 MMT. This production-consumption gap ensures global sugar ending stocks will remain elevated at 41.188 MMT, down 2.9% year-over-year but substantial enough to maintain downward price pressure. The persistent imbalance between record sugar cane supplies coming to market and tepid consumption growth leaves little prospect for meaningful price relief in the near term, cementing the bearish outlook for sugar markets across 2025 and into 2026.