Ethanol tightens pressure on the global sugar market

The global sugar market is facing increasing pressure from the biofuel sector, particularly ethanol production. Two leading sugar producers — India and Brazil — are increasingly competing for sugarcane use as a feedstock, reducing the potential global supply of sugar.

In India, the sugar industry warns that unless ethanol pricing improves, producers may partially scale back ethanol output and shift back toward sugar production. Under current economic conditions, ethanol output from molasses in the 2026/27 season could remain constrained at around 3 billion liters if profitability does not improve.

In Brazil, by contrast, producers are increasing their focus on ethanol amid weather-related risks linked to the El Niño phenomenon. This is intensifying competition for sugarcane between food and fuel uses, further tightening the global sugar balance.

According to the U.S. Department of Agriculture, global sugar production in the 2026/27 marketing year is projected to fall to 184.9 million tonnes. Declines in Brazil, the EU, the United States, and Thailand are expected to outweigh production growth in India.

The International Sugar Organization (ISO) forecasts a global deficit of around 262,000 tonnes. Against the backdrop of expected output reductions and rising weather risks, competition between sugar and ethanol is set to remain a key driver of global price dynamics.

Tags: Brazil, prices, sugar, India, biofuel