The global sugar market could shift from a surplus to a deficit as early as the 2026/27 marketing year. The International Sugar Organization (ISO) forecasts a shortfall of around 0.2 million tonnes. At the same time, the organisation has halved its estimate of the 2025/26 surplus from 2.2 million tonnes in May to 1.1 million tonnes, marking the fourth downward revision of the global balance this season.
One of the main reasons is weaker-than-expected sugar production in Centre-South Brazil. The decline is being partly offset by China, where output is expected to approach 13 million tonnes, the highest level since the 2013/14 season. However, sugar production outside Brazil could fall by around 4.4 million tonnes next season, mainly due to lower output in the EU, Thailand and Central America.
In the 2026/27 season, global sugar production is forecast at approximately 180.1 million tonnes, while consumption could increase to 180.4 million tonnes. Brazil could partially offset the decline if producers allocate a larger share of sugarcane to sugar production rather than ethanol.
El Niño remains another major risk for the market, as adverse weather could affect harvests in key producing countries. Sugar prices have already started to respond to these concerns, with the average ISA raw sugar price reaching 17.4 US cents per pound in August. While the ISO considers the recent rally somewhat premature, it warns that any deterioration in the 2026/27 production outlook could quickly widen the global deficit and provide further support for sugar prices.