From Surplus To Shortfall: ISO Forecasts Ethanol Growth And Sugar Market Shifts

On May 18, 2026, the International Sugar Organization released its latest global outlook for sugar and ethanol markets. The report highlights strong biofuel production, evolving consumption trends, and shifting balances in sugar supply and demand across major producing regions.

Ethanol Outlook

Global fuel ethanol output is expected to reach 129.4 billion litres in 2026, while consumption is projected at 126.9 billion litres. The surplus reflects robust production capacity, supported by government mandates for renewable energy and rising demand for cleaner fuels worldwide.

Sugar Market Forecasts

For the upcoming 2026/27 season, ISO forecasts a global sugar deficit of 0.262 million metric tons, pointing to tighter supply conditions. In contrast, for the current 2025/26 season, the surplus estimate has been revised upward to 2.244 million metric tons, compared to the earlier forecast of 1.22 million metric tons.

Market Implications

The contrasting forecasts underline the volatility of global sugar markets, influenced by crop yields, weather conditions, and regional demand. The ethanol surplus underscores the growing role of biofuels in energy transition, while the sugar deficit signals potential upward pressure on prices in the next season.

Forecast Highlights

•⁠  ⁠Global fuel ethanol output forecast at 129.4 billion litres in 2026

•⁠  ⁠Global fuel ethanol consumption projected at 126.9 billion litres in 2026

•⁠  ⁠ISO forecasts global sugar deficit of 0.262 million metric tons for 2026/27

•⁠  ⁠ISO raises 2025/26 global sugar surplus forecast to 2.244 million metric tons from 1.22 million

•⁠  ⁠Ethanol surplus reflects strong biofuel production capacity and renewable energy demand

•⁠  ⁠Sugar deficit points to tighter supply and possible price pressures

Sources: International Sugar Organization (ISO), Reuters