Global Sugar Surplus Looms as Production Outpaces Slowing Consumption
The Food and Agriculture Organization (FAO) estimates the global sugar market will return to a production surplus in 2025/2026. In its June 2026 Food Outlook report, the FAO projects world sugar production to reach 183.2 million tonnes, a 3.5% increase from the previous season’s 177 million tonnes. “The international sugar market is expected to shift towards a production surplus in 2025/2026, reflecting a recovery in global production and only moderate consumption growth,” the report stated. The increase is primarily attributed to major producers in Asia. India is expected to see a production recovery, despite excessive rainfall affecting cane yields in some key regions. Thailand is projected to record strong production growth thanks to favourable weather conditions, with increases also anticipated in China and Pakistan. Conversely, Brazil’s sugar production is expected to decline for a second consecutive season, as more sugarcane is diverted to ethanol production amid rising fuel demand. European Union production is also forecast to fall due to a reduction in sugar beet planting area. Global sugar consumption is projected to rise by only 0.9% to 179.3 million tonnes in 2025/2026, a slower pace than previously expected. The FAO attributes this deceleration to weakening global economic activity, which is anticipated to reduce demand from the beverage and food processing sectors, although consumption is still expected to grow in Asia and Africa. World sugar trade volumes are forecast to reach 64.1 million tonnes, a marginal 0.6% increase. Higher export availability from Thailand is expected to offset reduced shipments from the European Union, while Brazilian exports are seen as relatively stable and Indian shipments may increase modestly. The FAO also noted that conflict in the Middle East in 2026 disrupted regional sugar trade flows through the strategic Strait of Hormuz. International sugar prices remained under pressure throughout the season due to expectations of ample global supplies, though prices temporarily firmed in May 2026 following a rise in crude oil prices, which sparked concerns that increased ethanol production in Brazil could tighten sugar availability. Potential El Niño conditions also raised worries about future production in India and Thailand. Global sugar stocks are forecast to rise from 122.4 million tonnes to 126.3 million tonnes. Meanwhile, the Indonesian government is accelerating efforts to achieve national sugar self-sufficiency by strengthening smallholder sugarcane development. In 2026, the Ministry of Agriculture targets distributing 5.9 billion sugarcane seed buds to develop 99,547 hectares across 10 provinces and 74 regencies. Minister of Agriculture Amran Sulaiman stated the government is undertaking comprehensive reforms from upstream to downstream, including seed provision, improved planting patterns, and strengthened downstream processing and marketing systems, with the aim of ensuring profitability for sugarcane farmers. The government targets national sugar production to increase to around 3 million tonnes in 2026.