Insight Focus
The world could remain oversupplied with sugar in the 2026/27 season. But this oversupply is dependent on how much sugar Centre-South Brazil, the world’s largest cane region, makes in 2026. How much cane mills allocated to sugar or ethanol will be important, but so could any major El Nino climate event.
2026/27 at a Glance…
All figures in m tonnes tel quel
We forecast global sugar production at 180.7 million tonnes in 2026/27, up 0.3 million tonnes since April. This would be one of the largest annual sugar production totals we’ve ever seen, despite the market’s perception that production is weakening globally. However, there’s a wide range of possible outcomes for sugar production in CS Brazil; our forecast assumes 40 million tonnes of sugar. But mills’ sugar/ethanol output decisions this year will be dynamic because they are under-hedged on sugar and returns for both products have been converging. Meanwhile, a possible El Niño adds further risk.
2026/27 El Niño Risk
The American National Oceanic and Atmospheric Administration now believes El Niño is likely to emerge between June and August 2026 and persist into the end of the year. This matters because, although our projected sugar production surplus has increased to 1.4 million tonnes for 2026/27, it’s still small enough that it can’t absorb weather-related production losses.
The immediate impact in 2026/27 may still be limited. Cane is a resilient crop, and the effect of an El Niño varies depending on its timing, intensity and regional weather response. But even a modest loss of 0–2 million tonnes globally would be enough to erase the projected surplus and push the market into stock drawdown. The key risks are harvest disruption in Centre-South Brazil and weaker cane development in India and Thailand if rainfall disappoints.
The larger risk may come in 2027/28. Poor monsoon rainfall can affect ratoon cane development and replanting in India and Thailand, meaning the full production impact often appears one season later. In previous El Niño-linked years, global production losses have exceeded 5 million tonnes, although wet weather in Brazil can sometimes partly offset losses elsewhere. El Niño is therefore not the dominant price driver today, but it is becoming a more important upside risk for sugar prices.
Global Sugar Production
For now, we expect global sugar production to remain historically high. We now forecast 185.0 million tonnes in 2025/26, which would make it the second-highest production year on record, before output eases to 180.7 million tonnes in 2026/27.
The main upward revisions this month are in China and the EU. China’s 2025/26 crop continues to improve, and we now think production will be 12.7 million tonnes, supported by better-than-expected yields. We have also revised EU production higher to 16.6 million tonnes, lifting the 2025/26 global total by 1.0 million tonnes since the April update.
China is also the main reason our 2026/27 production forecast has increased. We now see Chinese sugar production at 12.9 million tonnes, up from 12.0 million tonnes previously, largely due to a larger sugar cane area. This more than offsets reductions elsewhere, including Ukraine, where we have cut our 2026/27 production forecast to 1.3 million tonnes following reports of a 20% reduction in beet area.
However, the outlook is not uniformly stronger. We have reduced Thailand’s 2026/27 production forecast to 9.8 million tonnes. Rainfall has been below normal this year, and a likely El Niño could bring further dry weather. Crop health is already under pressure in some areas from White Cane Leaf Disease, while low cane prices and rising input costs are also weighing on farmers’ cashflows.
Global Sugar Consumption
Sugar consumption growth remains slow. This is because of increased awareness of sugar intake, high food price inflation in recent years and the emergence of GLP-1 drugs.
That said, we think 2026/27 could show the strongest year-on-year consumption growth since 2022. We now forecast global consumption at 179.4 million tonnes, up 0.1 million tonnes from last month. Perhaps lower sugar (and other food) prices will help boost consumption?
Production Surplus in 2025/26 and 2026/27
For 2025/26, we now project a global sugar production surplus of 6.8 million tonnes, up from 5.8 million tonnes last month. This mainly reflects stronger production expectations in China and the EU-27, while consumption is broadly unchanged.
The 2026/27 balance has also improved. We now project a surplus of 1.4 million tonnes, up from 1.1 million tonnes in April. This is mainly due to a larger Chinese crop, where increased cane area has lifted our production forecast to 12.9 million tonnes. However, the surplus remains modest and could still be erased if El Niño causes even moderate production losses later this year.
Other Sugar Producers at a Glance…
All figures in million tonnes tel quel
