Global sugar prices rose sharply on Thursday as lower-than-expected sugar production in Brazil increased concerns over tightening supplies in the 2026/27 season. October NY world sugar #11 closed 2.77% higher at 15.59 cents per pound, while October London ICE white sugar #5 gained 2.10% to $486.20 per tonne. New York sugar reached its highest level in more than four months, while London sugar climbed to a one-month high.
The latest rally was triggered mainly by weaker sugar production in Brazil, the world’s largest sugar producer. Data from Unica showed that sugar production in Brazil’s Center-South region fell 26.3% year-on-year to 3.903 million tonnes in June. The decline has strengthened expectations that global sugar supplies could become tighter, particularly as the market enters the 2026/27 season.
Several commodity analysts have recently increased their forecasts for a global sugar deficit in 2026/27. Covrig Analytics now expects a deficit of around 300,000 tonnes, compared with its earlier forecast of a 100,000-tonne surplus. Green Pool Commodity Specialists increased its projected global deficit to 3.3 million tonnes, from 1.76 million tonnes previously, while StoneX raised its deficit forecast to 1.7 million tonnes, compared with 550,000 tonnes earlier.
Weather concerns are also supporting sugar prices. The outlook for weaker monsoon rainfall in India has raised concerns over the country’s sugarcane crop. India’s Meteorological Department has indicated that rainfall during August and September could remain below normal, while the Earth Sciences Ministry has warned that this year’s monsoon could be the weakest in more than a decade. India is the world’s second-largest sugar-producing country, making its crop outlook an important factor for global prices.
The potential development of an El Niño weather pattern has added further bullish sentiment to the sugar market. El Niño conditions can reduce rainfall in major sugar-producing regions such as Brazil, India and Thailand. The US Climate Prediction Center has indicated that the El Niño pattern that emerged in the equatorial Pacific could become one of the strongest in decades. India’s weather office has also lowered its forecast for cumulative monsoon rainfall during the June-September period to 90% of the long-term average, compared with 92% earlier.
However, India’s monsoon performance has improved compared with the beginning of the season. India’s cumulative monsoon rainfall was 11% below normal as of August 5, significantly better than the 42% deficit recorded on June 30. Improved rainfall had previously raised expectations of higher Indian sugar production and contributed to a decline in New York sugar prices last week.
Another factor supporting sugar prices is the changing production mix in Brazil. Sugar trader Czarnikow recently revised its global 2026/27 sugar balance from a surplus of 1.4 million tonnes to a deficit of 100,000 tonnes. The revision was partly linked to Brazilian mills producing more ethanol instead of sugar amid higher crude oil prices.
Brazil’s official crop outlook also points to slightly lower sugar production. Conab has forecast 2026/27 Brazilian sugar output at 43.952 million tonnes, down 0.5% from the previous season. At the same time, Brazilian ethanol production is expected to rise by 7.2% year-on-year to around 29.259 million litres, indicating a continued shift in cane utilisation between sugar and ethanol.
India’s sugar production outlook is also being closely watched by the global market. The Indian Sugar & Bio-energy Manufacturers Association (ISMA) had revised its 2025/26 sugar production estimate to 32 million tonnes, from 32.4 million tonnes earlier, while projecting sugar exports of around 800,000 tonnes. India has maintained restrictions and quotas on sugar exports in recent years to protect domestic supplies.
For 2026/27, forecasts for India remain mixed. The USDA expects Indian sugar production to rise by around 12% to 33.6 million tonnes, supported by higher sugarcane acreage and favourable monsoon conditions. However, concerns over rainfall and weather-related crop risks could alter the production outlook as the season progresses.
The global sugar market is also moving from an expected surplus in 2025/26 towards a potential deficit in 2026/27. The International Sugar Organization (ISO) expects global sugar production for 2025/26 to reach a record 182 million tonnes, resulting in a surplus of around 2.2 million tonnes. For 2026/27, however, ISO projects production to decline by about 1.15% to 180 million tonnes and expects a global deficit of around 262,000 tonnes, citing possible weather disruptions in India and Thailand.
The USDA has similarly projected a decline in global sugar production for 2026/27. Its latest forecast puts global output at 184.854 million tonnes, down from 186.056 million tonnes in 2025/26. Global sugar consumption is expected to increase 0.4% to a record 179.991 million tonnes, while ending stocks are forecast to rise slightly to 44.410 million tonnes.
The USDA expects Brazil’s 2026/27 sugar production to decline by 3% to 42.5 million tonnes, while Thailand’s output could fall 15.6% to 9.5 million tonnes. The combination of lower production in major exporting countries, weather uncertainty and stronger demand is keeping the global sugar market on alert.
With Brazil’s latest production figures falling sharply and concerns growing over weather conditions in India and other major producers, global sugar prices could remain volatile in the coming months. Market participants will closely monitor Brazil’s crushing pace, India’s monsoon performance and the development of El Niño conditions for further direction in sugar prices.
