Sugar futures closed higher on Friday, with New York March 2027 raw sugar (SBH27) advancing 0.19 cents, or 1.04%, while London March 2027 white sugar (SWH27) gained 6.20 points, or 1.20%.
The recovery came as traders weighed the prospect of tighter global supplies in the 2026/27 season against strong Indian production and the potential for increased Brazilian exports following weakness in the real. Weather disruption linked to a developing El Niño remains a major source of uncertainty, particularly across Brazil, India and Thailand.
The market now looks ahead to next week with a more complicated supply outlook: near-term production figures remain mixed, but several industry forecasts point towards a global deficit as weather risks threaten harvests and sugar output.
Market Snapshot
| Indicator | Latest Position |
|---|---|
| March 2027 NY raw sugar | +0.19 (+1.04%) |
| March 2027 London white sugar | +6.20 (+1.20%) |
| ISO 2026/27 production forecast | 180.1 MMT |
| ISO 2026/27 market balance | 200,000 MT deficit |
| Covrig 2026/27 deficit estimate | 490,000 MT |
| India 2026/27 production, Oct 1–Nov 5 | 1.29 MMT |
| Brazil cane crushed, first half October | 32 MMT |
| Brazil sugar production, first half October | 2.15 MMT |
| ISO 2025/26 production estimate | Record 182 MMT |
| USDA 2026/27 consumption forecast | 179.991 MMT |
Friday’s Sugar Market Close
Both major sugar benchmarks finished Friday higher, with New York raw sugar gaining 1.04% and London white sugar advancing 1.20%.
The positive close followed a difficult period for the market. On Tuesday, sugar prices had fallen to a six-week low as weakness in the Brazilian real raised concerns about stronger export availability from the world’s largest sugar producer.
Friday’s recovery suggests that supply-side concerns remain influential, particularly the possibility that adverse weather could reduce production across major growing regions. However, the market is still balancing those risks against evidence of stronger Indian output and the potential for Brazilian exports to increase.
Global Supply Outlook: ISO Forecasts 2026/27 Deficit
The International Sugar Organization (ISO) expects global sugar production to decline by 1% year-on-year to 180.1 million tonnes in 2026/27.
The organisation forecasts a global deficit of approximately 200,000 tonnes, citing the potential negative impact of El Niño on harvests in India and Thailand.
This represents a significant change in the supply outlook following the record production achieved in 2025/26. If weather disruption reduces output across the major producing regions, the global market could move towards a tighter balance.
However, other industry forecasts are more bearish on supply. Covrig Analytics raised its 2026/27 global deficit estimate to 490,000 tonnes from 300,000 tonnes in its August forecast.
Brazilian Real Weakness Raises Export Concerns
The Brazilian real has fallen sharply over the past three weeks, reaching a 17-month low against the US dollar on Friday.
A weaker real can encourage Brazilian sugar exporters to sell more aggressively because dollar-denominated sales translate into greater local-currency returns. This creates a potential source of downward pressure on international sugar prices.
Brazil accounts for approximately 23% of global sugar production and more than 50% of world sugar exports, according to the USDA. Consequently, currency movements in Brazil can have a substantial influence on international supply expectations.
Traders will be watching the real closely next week. Further depreciation could encourage additional export selling and offset some of the bullish impact from weather-related production concerns.
India Production Surges as Mills Increase Crushing Activity
Indian sugar production has provided a significant counterweight to the tightening global supply forecasts.
The Sugar & Bio-Energy Manufacturers Association (ISMA) reported that production during the 2026/27 season, from October 1 to November 5, reached 1.29 million tonnes, almost four times the 320,000 tonnes recorded during the same period a year earlier.
A total of 184 sugar mills were crushing sugarcane on November 5, compared with 154 mills at the same point last year.
India is the world’s second-largest sugar producer, making its production performance particularly important for global supply expectations.
The sharp increase in early-season output could weigh on prices if production continues at this pace. However, concerns about rainfall and the potential effects of El Niño remain important risks for the remainder of the season.
Brazil Weather Disruption Slows Cane Crushing
Weather conditions in Brazil have offered some support to sugar prices.
Persistent El Niño-related rainfall has slowed harvesting and cane crushing. Brazilian mills processed 32 million tonnes of sugarcane during the first half of October, down 18% from 39 million tonnes during the corresponding period last year.
Brazilian sugar production also declined by 23% year-on-year to 2.15 million tonnes during the first half of October.
If wet conditions continue to disrupt harvesting and processing, Brazilian output could remain under pressure. This would be particularly significant given the country’s dominant position in global sugar exports.
Covrig Raises Deficit Forecast as Supply Balance Tightens
Covrig Analytics increased its projected global sugar deficit for 2026/27 to 490,000 tonnes, compared with its previous estimate of 300,000 tonnes.
The group also revised its 2025/26 market balance, reducing its estimated surplus to 1.2 million tonnes from 5.2 million tonnes.
The changes reflect lower Brazilian sugar production and larger sugar imports by India.
These revisions reinforce the possibility that the market could move away from the surplus conditions associated with the previous season. However, the scale of any tightening will depend on actual production across the major growing regions.
Super El Niño Raises Production Risks
The developing Super El Niño in the Pacific Ocean is an important factor for the sugar market over the coming months.
Potential rainfall disruption across Brazil, India and Thailand could affect sugarcane development, harvesting and production in the world’s three largest sugar-producing regions.
India has already recorded rainfall 12.6% below normal during the June–September monsoon season, the weakest level in 11 years.
The extent to which these weather conditions affect final production remains uncertain, but the risk of lower output is contributing to the more cautious global supply forecasts.
India’s Sugar Import Policy Signals Supply Strain
India’s decision to permit up to 1 million tonnes of raw sugar imports tax-free is another important development.
The Directorate General of Foreign Trade initially announced the measure on August 20, allowing imports until October 31. On October 22, the deadline was extended to December 31.
The decision is notable because India is usually a sugar exporter and has not imported substantial volumes since the 2017/18 season.
The policy suggests that domestic supply conditions remain an important concern, despite the sharp increase in early-season production reported by ISMA.
Longer-Term Outlook: 2027/28 Deficit Risks
Looking further ahead, Czarnikow forecasts a global sugar deficit of 2.9 million tonnes in 2027/28.
The group expects global production to fall by 0.7% year-on-year to 177 million tonnes, with weather disruption in India, the European Union and Thailand contributing to the decline.
Brazilian mills shifting more sugarcane towards ethanol production rather than sugar could also restrict supplies, particularly if crude oil prices remain elevated.
This longer-term forecast highlights the potential for a more significant tightening of the global market beyond the current season.
Historical Context: Record Production in 2025/26
The tighter forecasts for 2026/27 and 2027/28 follow a record production year.
The ISO estimates that global sugar production reached 182 million tonnes in 2025/26, an increase of 3.5% year-on-year, with a surplus of approximately 1.1 million tonnes.
The contrast between the previous season’s surplus and the projected deficits ahead is central to the market’s changing outlook.
USDA Global Sugar Outlook
The USDA’s May biannual report projected global sugar production of 184.854 million tonnes in 2026/27, down 6.5% from its record 186.056 million tonnes forecast for 2025/26.
The USDA also expects human sugar consumption to increase by 0.4% year-on-year to a record 179.991 million tonnes.
Its forecasts include:
| USDA 2026/27 Forecast | Production |
|---|---|
| Global sugar production | 184.854 MMT |
| Global human consumption | 179.991 MMT |
| Global ending stocks | 44.410 MMT |
| Brazil production | 42.2 MMT |
| India production | 29.5 MMT |
| Thailand production | 9.5 MMT |
The USDA expects global ending stocks to increase by 2% year-on-year to 44.410 million tonnes, illustrating that estimates of the overall supply balance differ between organisations.
Its country-level forecasts point to lower production in Brazil, India and Thailand, although the projected declines vary significantly.
Bullish Sentiment
- ISO deficit forecast: The organisation expects a 200,000-tonne global deficit in 2026/27 as production falls.
- Covrig’s tighter balance: Its projected deficit has increased to 490,000 tonnes, reflecting lower Brazilian production and higher Indian imports.
- Brazilian production disruption: Cane crushing fell 18% year-on-year in the first half of October, while sugar production declined 23%.
- El Niño weather risk: Potential rainfall disruption across Brazil, India and Thailand could reduce global output.
- Longer-term deficit expectations: Czarnikow’s forecast of a 2.9-million-tonne deficit in 2027/28 points to the possibility of a more substantial supply squeeze.
Bearish Sentiment
- Weak Brazilian real: Further depreciation could encourage exporters to increase dollar-denominated sugar sales.
- Strong Indian early-season production: Output reached 1.29 million tonnes by November 5, almost four times the previous year’s level.
- More mills crushing sugarcane: India had 184 operating mills compared with 154 a year earlier.
- Previous season’s surplus: Record 2025/26 production demonstrates the scale of supply that the market is transitioning from.
- USDA ending-stock forecast: The USDA expects global ending stocks to increase by 2% in 2026/27, offering a more comfortable inventory outlook than some industry deficit forecasts suggest.
Sugar Price Forecast – What Traders Are Watching Next Week
The coming week will be important for assessing whether Friday’s gains can develop into a sustained recovery.
The market will be particularly sensitive to developments in Brazil, India and the wider weather outlook.
Key factors include:
- Brazilian real: Further weakness could encourage additional export selling and pressure New York and London futures.
- Indian production: Traders will assess whether the strong early-season production pace continues as more mills become operational.
- Brazilian cane crushing: Continued rainfall disruption could restrict output and provide further support to prices.
- El Niño developments: Weather forecasts for Brazil, India and Thailand will remain central to expectations for 2026/27 production.
- Global deficit revisions: Further changes to ISO, Covrig and other industry estimates could influence expectations for the coming seasons.
- Crude oil and ethanol economics: Higher energy prices could encourage Brazilian mills to favour ethanol production over sugar.
Supply Outlook
The global sugar supply outlook is becoming increasingly uncertain. The ISO and Covrig forecasts point towards a deficit in 2026/27, while Czarnikow expects a significantly larger shortfall in 2027/28.
However, stronger Indian production and the potential for additional Brazilian exports remain important counterweights.
The coming weeks will help determine whether weather disruption is severe enough to reduce production across the major growing regions or whether higher output in India and export availability from Brazil can keep the market adequately supplied.
Demand Outlook
The supplied market data points primarily to changing production and supply expectations rather than a major shift in global consumption.
The USDA expects human sugar consumption to rise 0.4% year-on-year to a record 179.991 million tonnes in 2026/27.
That forecast provides a relatively stable demand backdrop, but the balance between consumption, production and ending stocks will determine how quickly the market moves towards a tighter position.
Sugar Market Outlook for the Week Ahead
Sugar futures enter the new week on a stronger footing after Friday’s gains, with New York March 2027 raw sugar rising 1.04% and London March 2027 white sugar advancing 1.20%.
The broader outlook remains a contest between near-term supply pressure and growing concerns about future production. India’s early-season output has increased sharply, while weakness in the Brazilian real could encourage additional exports. Both factors could limit further price gains.
Against this, slower Brazilian cane crushing, lower sugar production and the threat of El Niño-related disruption across major producing regions provide significant support. The ISO’s forecast deficit for 2026/27 and the larger shortfall projected by Covrig reinforce the possibility of a tighter global market.
For next week, the Brazilian real, Indian production figures and weather developments will be critical. If Brazilian supply remains constrained and concerns about El Niño intensify, sugar could extend Friday’s recovery. If Indian output remains strong and the real continues to weaken, prices may struggle to sustain upward momentum.
The market’s longer-term supply outlook is becoming more supportive, but traders will need further evidence that production losses are materialising before treating the latest rally as the beginning of a sustained bullish trend.
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Disclaimer: This article is provided for informational and market commentary purposes only. It does not constitute investment advice, financial advice or a recommendation to buy or sell any financial instrument. Commodity prices are subject to volatility, and readers should conduct their own research before making trading or investment decisions.
