Sweet Supply, Sour Sentiment: Surplus Sends Sugar Futures Sliding |

Updated: January 22, 2026 11:29

Image Source: Commodity Board Europe GmbH

Global sugar prices remain under pressure as forecasts point to a significant surplus in the 2025/26 season. Rising production in India, Thailand, and Brazil is expected to outpace consumption, driving prices to multi-year lows. Traders brace for volatility as oversupply reshapes market dynamics and weighs on investor sentiment.

The global sugar market is facing renewed bearish momentum, with prices sliding to four-year lows of 15.8 US cents per pound as of Thursday, January 22, 2026, 11:25 AM IST. The decline reflects mounting concerns over a global surplus expected in the 2025/26 marketing year, a development that has rattled commodity traders and food processors alike.

Key highlights shaping the market outlook:

Production surge: The International Sugar Organization (ISO) projects global sugar output to reach 181.8 million tonnes, an increase of 5.5 million tonnes from last season. Major contributions are expected from India, Thailand, and Pakistan, where favorable weather has boosted harvests.

Consumption lag: Global demand is forecast to rise modestly to 180.1 million tonnes, leaving a surplus of 1.6 million tonnes. Rabobank analysts, however, estimate a larger surplus of 2.6 million tonnes, citing India’s recovery after poor monsoons.

Bearish projections: Commodity house Czarnikow warns of a massive 7.5 million tonne surplus, the largest since 2017–18, with production potentially hitting 185.9 million tonnes while consumption slips to 178.3 million tonnes.

Price impact: Futures markets reflect this imbalance, with sugar trading at levels not seen since 2021. Oversupply has eroded bullish sentiment, leaving traders cautious about near-term recovery.

Regional dynamics: Brazil’s ethanol blending mandate at 30% has shifted part of sugarcane use toward fuel, but strong harvests continue to add to global supply. India’s export quota of 1.5 million tonnes further underscores the pressure on international markets.

The ratio of ending stocks to consumption is expected to dip slightly, from 53.1% to 52.7%, signaling that while inventories remain high, demand growth is insufficient to absorb the glut. Analysts note that the combination of robust harvests and tepid consumption growth is creating a structural imbalance that could persist into 2027.

For stakeholders, the implications are clear: food processors may benefit from lower input costs, but farmers and exporters face shrinking margins. Market watchers advise caution, as volatility could intensify if weather patterns shift or if governments adjust trade policies.

The sugar market’s current trajectory highlights the delicate balance between production cycles, consumption trends, and policy interventions. With surplus fears dominating sentiment, the commodity’s outlook remains firmly tilted toward bearishness.

Sources: International Sugar Organization (ISO), Rabobank, Czarnikow, Reuters, AgroReview, AgroPortal.ua, Hectar Global Insights

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