Global sugar market faces deficit of over 6 mln tons due to poor harvests

The global sugar supply deficit in the 2026/27 season could rise to 6.28 mln tons, exceeding the previous estimate by 3 mln tons. The forecast was released by market analyst Green Pool Commodities. The main reasons for the worsening global supply balance are unfavorable weather conditions and declining production in major sugar-producing regions, particularly Brazil, India and the European Union. The El Niño weather phenomenon is also negatively affecting crop yields, bringing abnormal rainfall and drought to different parts of the world.

The situation in Brazil, the world’s leading sugar exporter, is causing particular concern. Excessive rainfall associated with El Niño has caused sugarcane harvesting and crushing to fall significantly behind earlier forecasts. In late September, crushing volumes were again below normal levels, while cumulative sugar production was 14% lower than in the corresponding period last year. As a result, Green Pool lowered its sugar production forecast for Brazil’s center-south region by 600 thsd tons to 37.3 mln tons.

Sugar production in the European Union is also expected to decline due to unfavorable weather conditions. Prolonged periods of heat and drought during the summer negatively affected sugar beet yields, prompting analysts to revise their production outlook. The forecast was reduced by 228 thsd tons to 12.44 mln tons. Green Pool does not rule out further downward revisions, which could tighten the European sugar market and affect the region’s demand for imports.

Additional supply losses are expected in India, where the government decided to begin processing the new sugarcane crop earlier because of limited domestic stocks. However, harvesting cane before it reaches optimal maturity could result in the loss of 300–400 thsd tons of sugar production. The situation is further complicated by insufficient rainfall toward the end of the monsoon season in the states of Maharashtra and Karnataka. Water shortages could lead to restrictions on the use of reservoir supplies for agricultural purposes, creating additional risks for future production.

The deterioration in production forecasts has already affected global sugar prices. Last week, raw sugar futures reached 21.29 cents per pound, their highest level in 19 months. Further price movements will depend on actual production volumes in Brazil, India and the EU, as well as weather developments. A widening global supply deficit could support elevated international sugar prices and intensify competition among importers for available supplies.

Tags: weather conditions, sugar, global market