ISO halves global sugar surplus estimate

The International Sugar Organization (ISO) has cut its forecast for the global sugar surplus in 2025/26 to 1.1 mln tons, down from 2.2 mln tons projected in May. This is already the fourth downward revision to the balance during the season.

The downgrade was mainly driven by weaker-than-expected sugar production in Centre-South Brazil during the first half of the cane crushing season. This was partly offset by China, where production is estimated at nearly 13 mln tons — the highest since 2013/14.

For 2026/27, ISO is already forecasting a small global sugar deficit of 0.2 mln tons. Production is expected at 180.1 mln tons, compared with 180.7 mln tons in the current season, while consumption is forecast to increase from 179.6 mln to 180.4 mln tons.

Production outside Brazil could decline by around 4.4 mln tons, mainly due to lower output in the EU, Thailand and Central America. At the same time, Brazil could allocate a larger share of sugarcane to sugar rather than ethanol production, as the recent rally in sugar futures has made sugar more attractive for processors.

ISO sees El Niño, potentially one of the strongest on record, as the main risk to its forecast. Raw sugar prices already rallied sharply in August, with the average ISA Daily Price reaching 17.4 cents/lb. ISO considers the rally somewhat premature based on current fundamentals, but warns that any deterioration in the 2026/27 production outlook could quickly deepen the global deficit and provide further support to prices.

Tags: ISO, sugar, global market