Global Sugar Surplus Pressures Prices as Production Surges Worldwide

The global sugar market is facing a significant supply glut, with prices tumbling to multi-week lows as major producing nations boost output substantially. This oversupply scenario represents a marked shift from earlier market conditions, creating downward pressure across trading venues.

Production Boom Across Key Sugar-Growing Nations

India, the world’s second-largest sugar producer, is experiencing a production surge driven by favorable agricultural conditions. The India Sugar Mill Association (ISMA) reported in November that the country’s 2025/26 sugar production estimate reached 31 MMT, up +18.8% year-over-year from the prior season’s 26.1 MMT low. Early-season crushing data showed Indian output jumped +43% in October-November to 4.11 MMT. With abundant monsoon rainfall marking the strongest conditions in five years—cumulative rainfall was 937.2 mm, 8% above normal—expectations point to even larger harvests, with some projections reaching as high as 34.9 MMT for the season.

Brazil, traditionally the largest global sugar supplier, is also ramping up production significantly. The Brazilian government’s crop forecasting agency (Conab) raised its 2025/26 forecast to 45 MMT in November, up from 44.5 MMT previously. First-half November data showed Brazil’s Center-South region increased output +8.7% year-over-year to 983 MT, with cumulative production through mid-November rising +2.1% year-over-year to 39.179 MMT. This robust output is being supported by a weaker Brazilian Real, which has declined to 1.75-month lows against the dollar. The currency weakness encourages Brazilian sugar producers to accelerate export sales, further flooding global markets.

Thailand, the world’s third-largest producer and second-largest exporter, is also expanding capacity. The Thai Sugar Millers Corp projects the 2025/26 crop will reach 10.5 MMT, representing +5% year-over-year growth from prior levels.

The Global Oversupply Reality

The confluence of increased production across multiple continents is creating an unprecedented global surplus. The International Sugar Organization (ISO) forecasts a 1.625 million MT surplus for 2025/26, a dramatic reversal from the 2.916 million MT deficit in 2024/25. This represents a complete market reversal in just twelve months. The private sector analysis from Czarnikow estimates the global surplus could reach as high as 8.7 MMT for 2025/26, up significantly from a September estimate of 7.5 MMT.

Global production is projected to climb +3.2% year-over-year to 181.8 MMT according to ISO, while the USDA forecasts even higher levels at 189.318 MMT. Simultaneously, global consumption is expected to increase only modestly at +1.4% year-over-year to 177.921 MMT, meaning output is growing more than three times faster than demand.

Market Impact and Price Pressure

This imbalance has crushed prices significantly. March NY world sugar (#11) closed down -0.15 (-1.01%) on Tuesday, while March London ICE white sugar (#5) fell -3.80 (-0.90%). These declines pushed prices to three-week lows. The broader trend has been even more dramatic, with London sugar posting 4.75-year lows in mid-November and NY sugar reaching 5-year lows in early November.

India’s modification of its export quota policy has further pressured prices. The Indian food ministry announced it would allow 1.5 MMT of sugar exports in 2025/26, below the earlier estimate of 2 MMT. While this represents a constraint, the sheer production volume means that even with limited exports, domestic availability supports the global supply situation.

Outlook and Implications

The oversupply environment appears structural rather than temporary. With production growth outpacing consumption by a significant margin, and major producers like Brazil experiencing currency headwinds that encourage exports, the global market faces persistent downward price pressure. The shift from a 2.916 million MT deficit just one year ago to a projected 1.625 million MT surplus demonstrates how rapidly supply dynamics can reshape commodity markets, with implications for sugar traders and end-users worldwide.