Global Sugar Stocks Swell Amid Surging Production and Mounting Surplus

The global sugar market is facing mounting pressure from swelling sugar stocks and abundant supply, as production forecasts across major regions significantly exceed consumption growth. NY and London sugar futures both tumbled this week, with March NY world sugar #11 (SBH26) closing down -0.43 (-2.93%) on Friday and March London ICE white sugar #5 (SWH26) sliding -7.10 (-1.72%). The broader weakness reflects a fundamental supply imbalance: multiple commodity specialists are projecting substantial global sugar stocks accumulation throughout 2025/26 and into 2026/27.

The magnitude of the surplus is striking. Green Pool Commodity Specialists forecasts a 2.74 MMT global sugar surplus for 2025/26 and a smaller 156,000 MT surplus for 2026/27. StoneX, meanwhile, projects an even larger surplus of 2.9 MMT for 2025/26. These forecasts underscore how persistent sugar stocks are expected to remain, weighing heavily on prices even as demand continues to grow modestly.

Production Expansion Outpaces Consumption Growth

The USDA’s latest projections paint a picture of robust supply relative to demand. In its December 16 bi-annual report, the agency forecasted that global 2025/26 sugar production would climb +4.6% y/y to a record 189.318 MMT, while global 2025/26 human sugar consumption would increase at a more modest +1.4% y/y to 177.921 MMT. This production-to-consumption gap is a key driver of sugar stocks accumulation, with the USDA projecting that 2025/26 global sugar ending stocks would fall only marginally by -2.9% y/y to 41.188 MMT—still historically elevated.

The International Sugar Organization (ISO) corroborates this outlook. ISO forecast a 1.625 million MT sugar surplus in 2025-26 following a 2.916 million MT deficit in 2024-25, with global production expected to rise +3.2% y/y to 181.8 million MT. Notably, sugar trader Czarnikow on November 5 boosted its global 2025/26 sugar surplus estimate to 8.7 MMT, up +1.2 MMT from its September estimate—suggesting that sugar stocks concerns may be even more pronounced than earlier anticipated.

Brazil and India Lead Output Surge, Pressuring Sugar Stocks

Brazil, the world’s largest sugar producer, is driving much of the global production increase. Conab, Brazil’s crop forecasting agency, raised its Brazil 2025/26 sugar production estimate to 45 MMT in November, reflecting record-high output. The USDA’s Foreign Agricultural Service (FAS) projected that Brazil’s 2025/26 sugar production would reach 44.7 MMT, up +2.3% y/y—still near record levels. Adding to supply pressures, Unica reported that Brazil’s cumulative 2025-26 Center-South sugar output through December rose +0.9% y/y to 40.222 MMT, with the ratio of cane crushed for sugar rising to 50.82% in 2025/26 from 48.16% in 2024/25, signaling aggressive production prioritization.

India, the world’s second-largest sugar producer, is also ramping up significantly. The India Sugar Mill Association (ISMA) reported that India’s 2025-26 sugar output from Oct 1-Jan 15 surged +22% y/y to 15.9 MMT. The ISMA had raised its full-year 2025/26 India sugar production estimate to 31 MMT in November, up +18.8% y/y from its earlier forecast of 30 MMT. The FAS, meanwhile, projected India’s 2025/26 sugar production would increase by 25% y/y to 35.25 MMT, driven by favorable monsoon rains and increased sugar acreage.

Thailand, the world’s third-largest sugar producer and second-largest exporter, is also expanding. The Thai Sugar Millers Corp on October 1 projected that Thailand’s 2025/26 sugar crop would increase by +5% y/y to 10.5 MMT. The USDA’s FAS predicted a more modest +2% y/y increase to 10.25 MMT. Combined, these three major producers account for the bulk of the anticipated global production surge, directly contributing to the buildup of sugar stocks.

Export Surge and Domestic Policy Shifts Fuel Supply Glut

Beyond production growth, shifting export policies are compounding the sugar stocks challenge. India’s government has signaled willingness to boost sugar exports to relieve domestic supply pressures. The India Sugar Mill Association cut its estimate for sugar used for ethanol production in India to 3.4 MMT from a July forecast of 5 MMT, potentially freeing additional sugar for export. In November, India’s food ministry said it would allow mills to export 1.5 MMT of sugar in the 2025/26 season, expanding beyond the quota system introduced in 2022/23 when late rains had constrained production.

This marks a significant policy shift that is expected to amplify global sugar stocks availability. India’s willingness to permit additional sugar exports reflects the pressure from domestic supply gluts, showing how regional overstock situations feed into global market dynamics.

The Future Outlook: When Will Sugar Stocks Begin to Normalize?

Looking further ahead, some market participants see potential relief, though sugar stocks remain a near-term headwind. Consulting firm Safras & Mercado projected that Brazil’s sugar production in 2026/27 would decline by -3.91% to 41.8 MMT from the 43.5 MMT expected in 2025/26. The firm expects Brazil’s sugar exports to fall by -11% y/y to 30 MMT in 2026/27. These forecasts suggest that sugar stocks pressures may ease somewhat in the following season.

However, Covrig Analytics presents a more complex picture. On December 12, Covrig raised its 2025/26 global sugar surplus estimate to 4.7 MMT from 4.1 MMT in October—the most bearish view among major forecasters. Yet Covrig also projects that the 2026/27 global sugar surplus will contract to 1.4 MMT, as weak prices discourage future production, potentially leading to tighter sugar stocks further out.

The immediate pressure on prices reflects the reality that global sugar stocks will remain elevated well into 2026. Market participants watching commodity futures will likely remain focused on whether production growth moderates and export activity slows, ultimately determining when sugar stocks accumulation finally begins to normalize.