El Nino poses mixed outlook for sugar as Brazil, India face weather risks
A strong El Niño in 2026-27 could disrupt sugar production in India, Thailand and Brazil. India may face weaker monsoon rainfall and a potential 1-million-tonne production loss, while excessive Brazilian rainfall could delay harvesting. However, stronger Brazilian output may offset losses elsewhere, limiting sustained global sugar price increases.
A potentially strong El Nino weather pattern could disrupt global sugar production, although the impact on the sweetener market may be less severe than on crops such as cocoa and coffee, according to a Reuters report cited by Modern Diplomacy.
The US Climate Prediction Center sees a more than 90% chance of a very strong El Nino developing during the northern hemisphere autumn and winter of 2026-27. The weather pattern typically lasts nine to 12 months and can bring changes in rainfall and temperatures that affect crop production.
For sugar, the main risks are emerging in Brazil, India and Thailand, three major producers and exporters.
Brazil, the world’s largest sugar exporter, could receive heavier rainfall during the second half of the year. Excess rain could slow harvesting and affect the quality of sugarcane. However, better rainfall could also support the country’s following crop and help increase future sugar supplies.
India and Thailand could face the opposite problem, with El Nino generally linked to weaker monsoon rainfall in both countries.
India is already expecting its lowest monsoon rainfall in 11 years, at about 90% of the long-term average. Hedgepoint estimates that a moderate El Nino could reduce India’s sugar production by about 1 million tonnes, the report said.
The impact on global supplies could depend largely on how Brazil’s crop performs. Brazil accounts for about half of global sugar exports, meaning stronger production there could make up for lower output in India and Thailand and limit a prolonged rise in global sugar prices.
El Nino’s effect on sugar is different from its potential impact on cocoa and coffee because weather conditions vary across producing regions. Heavy rain in one country can occur at the same time as drought in another.
Cocoa is considered particularly vulnerable because Ivory Coast and Ghana account for about half of global production. Coffee also faces risks, especially robusta, with Vietnam and Indonesia producing about half of the world’s supply. Both crops have previously suffered from extreme weather linked to El Nino.
For sugar, however, the weather pattern could produce mixed results. Lower rainfall in India and Thailand could reduce output, while improved rainfall in Brazil could support the next crop.
The overall impact will depend on the timing and intensity of the weather changes, with climate change making the relationship between El Nino and crop production increasingly difficult to predict. For sugar markets, the performance of Brazil’s crop will remain a key factor in determining whether losses in other producing countries translate into higher global prices.
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Source : ChiniMandi
