Small surplus is expected on the world sugar market – Rabobank

The global sugar market is expected to have a surplus of around 2.6 million tonnes in 2025/26 MY, driven by a recovery in India’s production after a poor harvest in the previous season.

Charles Hart, an analyst with Rabobank’s Agri Commodities Markets Research (ACMR) team, told the RaboResearch podcast.

India’s sugar production is expected to recover after two consecutive over-rainy monsoons in 2025, which supported the crop. The Indian government has set a sugar export quota of 1.5 million tonnes.

Brazil has seen high use of sugarcane for bioethanol, which has led to a decline in fuel production. The government has increased the ethanol blending mandate to 30% since early August. The sugar share in the blend is expected to decrease slightly in the 2026-2027 season.

Prices in 2025 were influenced by large short positions of funds in the US market, which recovered after the resumption of CFTC reports. China and regional partners are supporting India’s exports, and weather conditions in Brazil and Thailand could also affect prices.

Rabobank analysts note that while the surplus exists, it is small, so prices will remain sensitive to changes in weather conditions and production balances in key countries.

Tags: sugar, supply and demand balance