USDA expects better supply

The global sugar supply is expected to be more abundant in 2025/26, as there is a clear increase in production quantity. The United States Department of Agriculture (USDA) predicts in its latest report for the relevant marketing season a production of 189.32 million tons of raw centrifugal sugar; this would be 8.56 million tons or 4.7% more than the previous year.

Favorable weather conditions for sugarcane crops

In particular, the US Department of Agriculture expects a significant increase in sugar production in India, with an increase of 7.25 million tons or 25.9% to 35.25 million tons. The reasons cited include favorable weather conditions for sugarcane crops and an expansion of cultivation area. India ranks second among sugar-producing countries and is the third-largest sugar provider in the world, after Brazil and Thailand.

Continued growth in sugar production in Brazil

The USDA also anticipates an expansion of sugar production in Brazil, by 1 million tons to 44.7 million tons. This assessment is also attributed to favorable weather conditions for sugarcane crops. However, the proportion of plants processed into sugar is expected to decrease to 49% in favor of ethanol production. In addition, production increases of 500,000 tons to 11.5 million tons for China and 210,000 tons to 10.25 million tons for Thailand are forecasted.

EU sugar production expected to decline in 2025/26

In contrast, the US officials estimate that sugar factories in the European Union will produce only 15.01 million tons in 2025/26, which is 1.49 million tons or 9% less than the production in the current marketing season of 2024/25. The sugar beet cultivation area for the upcoming campaign is expected to be reduced by a total of 10% - especially in key producer countries like France and Germany.

Global sugar production surpasses consumption

If the US officials are correct, global sugar production in 2025/26 will exceed the expected human consumption by 11.4 million tons. In the previous year, the surplus was only 5.32 million tons. However, global sugar consumption in 2025/26 is projected to reach a record of 177.92 million tons, which is 2.49 million tons or 1.4% more than the previous year. The expected growth in demand is primarily driven by the anticipated increase in demand from the gastronomy industry in India. Consumption is also expected to increase in countries such as Iran, Pakistan, Nigeria, Indonesia, and Egypt. Meanwhile, US experts predict a sugar demand of 16.4 million tons for the EU, which would correspond to the estimated level for the current marketing season.

Global export supply decreases

According to the USDA, global sugar exports are expected to decrease by 2.72 million tons or 4% to 65.23 million tons in 2025/26 compared to the previous year. The Washington officials believe that Thailand will significantly reduce its exports by 3 million tons or 30% to 7 million tons. This is attributed to intense competition from other major exporting countries such as Brazil, which is expected to increase its sugar exports by 910,000 tons to 35.8 million tons. On the other hand, the USDA expects a reduction in EU exports by 1.1 million tons or 51.7% to 1.01 million tons, with the likely decrease in production being the trigger. In contrast, the EU is expected to increase its imports by 450,000 tons or 23.1% to 2.4 million tons.

Sufficient supply remains below average in the long term

Overall, Washington market experts anticipate that global sugar stocks will increase for the first time in four years during the 2025/26 season, from 38.31 million tons at the beginning to 41.19 million tons at the end. This quantity could cover the projected global sugar demand for the marketing period for approximately 85 days, which is almost five days more than the estimate for 2024/25. However, the five-year average is 95 days. Despite the improvement, the long-term supply remains significantly below average.

Sugar prices decline

In line with the optimistic USDA production forecast, sugar futures prices have recently declined. At the Intercontinental Exchange (ICE) in London, the front-month August contract for white sugar was temporarily traded at around $483 per ton on Friday (23rd May), the lowest price in about two and a half months. This continues the medium-term downward trend; in the second half of March 2025, the future had reached an interim high of $549.60 per ton.