The global sugar market is projected to switch from a surplus of 2.29 million metric tons in the 2025/26 season (October-September) to a deficit of 0.55 million tons in 2026/27 as production falls in key regions due to lower prices, said broker StoneX on Tuesday.
The company said at its annual conference at the New York Sugar Week that the El Nino weather anomaly, which is expected to develop later this year, could have a moderate intensity in India, the world's second-largest sugar producer, and slightly hurt production there.
The biggest crop reductions were seen in the United Kingdom plus European Union area, where sugar output is estimated to fall 12.5% to 15.3 million tons, and in Thailand - normally a key global exporter - where StoneX sees sugar production falling 15% to 10.2 million tons.
In Thailand, the biggest factor is price. After months of depressed sugar prices, farmers are switching to other crops, notably cassava, StoneX head of sugar and ethanol Rodrigo Martini said.
Global sugar production was projected to fall 1% in 2026/27 to 193.7 million tons, while global demand was estimated to increase 0.5% to 194.3 million tons.
Speculators are following the supply situation and have reduced their short position in sugar from more than 265,000 contracts in mid-February to around 90,000 contracts currently.
Martini said, however, that the recent price rally was driven by the Middle East conflict, with sugar following oil as higher energy prices boost Brazil ethanol output, and cut sugar production.
"The market is not bullish enough to rally hard, and not bearish enough to collapse," he said, expecting raw sugar to trade range-bound in the mid-term.
Published on May 13, 2026