Global sugar deficit likely in 2026–27 as demand outpaces production
The global sugar market is expected to shift into a supply deficit in 2026–27 as production declines in major regions including the EU, Thailand, and India. Rising demand, weather risks linked to El Niño, and Brazil’s increasing ethanol diversion could tighten supplies further, while sugar prices are expected to remain stable in the medium term.
The global sugar market is set to shift into a deficit in the 2026–27 season as demand is expected to exceed production, according to StoneX.
The brokerage said the market will move from a surplus of 2.29 million metric tons in 2025–26 to a deficit of 0.55 million tons in the following season, largely due to lower output in key producing regions, Reuters reported.
Speaking at the New York Sugar Week conference, StoneX noted that a developing El Niño weather pattern later this year could have a moderate impact on India, the world’s second-largest sugar producer, slightly reducing output.
Production declines are expected to be most significant in the United Kingdom and the European Union, where output is projected to fall by 12.5 percent to 15.3 million tons. Thailand, a major global exporter, is also likely to see a 15 percent drop in production to 10.2 million tons.
In Thailand, falling sugar prices have led farmers to shift to alternative crops such as cassava, said Rodrigo Martini.
Globally, sugar production is forecast to decline by 1 percent to 193.7 million tons in 2026–27, while demand is expected to rise by 0.5 percent to 194.3 million tons.
Market participants have been adjusting their positions in response to tightening supplies, with speculators cutting their short positions from over 265,000 contracts in mid-February to around 90,000.
Martini said recent price gains were influenced by tensions in the Middle East, as higher energy prices encourage Brazil to divert more sugarcane toward ethanol production, reducing sugar output.
“The market is not strong enough to rise sharply, and not weak enough to fall significantly,” he said, adding that prices are likely to remain range-bound in the medium term.
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